Sterling Remains at Five-Month Low Against Dollar Amid Rising UK Unemployment Rate
Sterling Holds Steady at Five-Month Low
Sterling remained at a five-month low against the dollar on Tuesday following data that revealed a higher-than-expected increase in Britain’s unemployment rate.
Pound Flat Against Dollar
The pound was flat against the dollar at $1.24475, having reached its lowest point since November 17 earlier in the day.
Steady Performance Against Euro
It also maintained its stability against the euro, standing at 85.36 pence.
UK Unemployment Rate Rises
The UK unemployment rate for the three months leading to February rose to 4.2% from 3.9%, exceeding economists’ forecast of 4%.
Wage Growth Slows Down
Regular wages excluding bonuses grew by 6.0% year-on-year, indicating a slight slowdown compared to the previous period.
Market Analysis and Predictions
Analysts suggest that the cooling labor market could lead to rate cuts by the Bank of England, affecting the pound’s performance against the dollar.
Market Expectations and Inflation Concerns
Investors are closely monitoring inflation data for insights into the BoE’s rate cuts, with expectations leaning towards a policy easing in August.
Market Sentiment and Rate Cut Predictions
Money markets anticipate interest rate cuts by the BoE this year, with the first cut likely in August. Meanwhile, the U.S. inflation figures have influenced expectations regarding the Federal Reserve’s rate cut timeline.
