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UK data looks good, one day before the big referendum: the unemployment rate fell to 6.2%, average hourly earnings rose by 0.6% (both in July) and Claimant Count Change is down 37.2K in August. All the data is better than expected. The MPC Meeting Minutes showed a 7:2 vote against a rate hike, exactly like the previous month. The rise in wage inflation is really good news for the UK.

GBP/USD was already on the move higher and it is now reaching a bit more: 1.6333 is the new high.  Update: the pair is now sliding: it seems like a case of “buy the rumor, sell the fact”. Nevertheless, it holds on to 1.63.

Good data

Previous data was revised to the upside as well: Claimant Count Change (or jobless claims) for July  now show a fall of 37.4K. The drop in wages for July is now only 0.1% instead of 0.2% originally reported. This makes the 0.6%  even stronger.

The UK was expected to report a drop of 29.7K  unemployed in August after 33.6K in July (before revisions). The unemployment rate for July was expected to drop to 6.3% in July from 6.4% in June.  The Average Earnings Index was expected to rise by 0.5%, in July after dropping by 0.2% last time. Wage inflation is becoming critical to UK policymakers.

MPC Unchanged

The tone of the MPC minutes is not different than in previous months: a gradual rate rise is expected when the time comes. However, at the moment there isn’t sufficient price pressure to justify a rate rise. This is Governor Mark Carney’s general line.

The  Monetary Policy Committee Meeting Minutes were expected to show another split vote regarding the rates: 7 in favor and 2 against. When  Weale and  McCafferty voted for a hike for the first time in August, the pound certainly enjoyed it.

Scotland and the pound

GBP/USD was trading higher towards the publications, rising above 1.63 and reaching 1.6320  after recent  opinion polls in Scotland showed the No vote in the lead, albeit with a small margin.

These are usually very important releases that rock the pound, but the impact may be somewhat smaller given the historic referendum on Scotland tomorrow.

Scotland Referendum: Timetable for forex traders