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UK jobless claims (aka Claimant Count Change) for June dropped by 21.2K – a huge and encouraging drop. They were expected to drop by 7.5K after 8.6K last time (before revisions). The unemployment rate was predicted to remain unchanged at 7.8% in May, and that’s what happened.  

The bigger event is the release of the meeting minutes from Mark Carney’s first decision as governor of the BOE and here, after a few times that 2 members voted for more QE, all 9 members voted against more QE. The combination of these releases is very pound positive.

Towards the big publication, GBP/USD was on the rise, moving back above 1.51. However, it seems like a theme of USD weakness, as also the euro was strengthening and EUR/GBP hit a new high. GBP/USD is now 100 pips higher, at 1.5220 and moving.

More interesting data: an announcement about forward guidance / qualitative thresholds could come in the upcoming quarterly inflation report, and not in the next rate decision. Both are due for early August.

Update: Cable reached 1.5244 before sliding back down to 1.5217. The option of introducing forward guidance in a few weeks is weighing on the pound and limiting the gains.

Opinion:  Sterling’s post minutes surge – a sell opportunity

The average earnings index rose by 1.7% against 1.4% expected.  Yesterday, UK inflation figures came out a bit weaker than expected: CPI stands at 2.9%, within the 1-3% target.

Mark Carney made his mark in the first meeting by sending a warning about long term interest rates. Was the move made as a precursor to future policy? Or just a warning that interest rates will stay lower for longer?

For more, see the GBP USD forecast.