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Solid Economic News Leads to Big Gains for the Pound
The British economy seems like it is well on its way to recovery following the release of the Claimant Count Unemployment figures earlier today. According to the report, unemployment fell by a surprising figure of 15.2K in December, defying predictions of -3.3K. This was the second straight month of declines and has led to heavy speculation that the U.K. economy is advancing at a quicker pace than originally thought. Combine today’s results with yesterday’s British Consumer Price Index report, and one has to wonder how long it will really take for the Bank of England (BOE) to adjust its record low interest rates.
This news has resulted in significant gains for the British Pound in the international marketplace. The EUR/GBP is currently trading around the 0.8690 level, down over 30 pips since this morning. The GBP/CHF has risen over the 1.6980 level, up over 60 pips from earlier today.
While British economic indicators have indeed been positive lately, BOE officials are quick to caution against over-optimism. While growth in the U.K. economy is occurring, it is still weak. Traders will want to pay careful attention to future news events to better gauge where the British economy is heading.
