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Pound Recovers Asian Session Losses After UK Jobless Rate, BoE Minutes

Aug 15 2012

The pound erased some of its Asian session losses against other major currencies in early London/European deals Wednesday as the U.K. jobless rate fell unexpectedly in June and the Bank of England policy makers unanimously decided to keep rate and QE unchanged.

The number of Britons claiming jobless benefits unexpectedly declined by 5,900 to 1.59 million in July, less than analysts' prediction of a rise by 6,000 persons. The measure was higher by 35,600 person from a year ago. The claimant count rate was 4.9 percent during the month, unchanged from June. That was in line with economists' expectations.

The ILO unemployment rate unexpectedly fell to 8 percent in the three months to June. Economists had forecast the figure to hold steady at 8.1 percent. The latest figure is the lowest since the same period last year, when it was at 7.9 percent.

Bank of England policymakers unanimously decided to retain quantitative easing at GBP 375 billion and the interest rate unchanged at 0.50 percent, the minutes of the meeting held on August 1 and 2 showed today.

The nine-member Monetary Policy Committee discussed whether it was appropriate to expand or continue with the programme of asset purchases it had agreed at its previous meeting.

"All members agreed that it was appropriate at this meeting to continue with the asset purchase programme announced at its previous meeting," the minutes showed.

For most members, the decision was relatively straightforward. Over the coming months, the MPC could take stock of the impact of the Funding for Lending scheme and the implications this had for other potential policy options. For some members, the decision was nevertheless more finely balanced.

The sterling snapped back above the key 1.57 level against the US dollar post-BoE and ONS data from a 2-day low of 1.5662 that hit at the beginning of the session. The next likely resistance level is seen at 1.5750 and a probable support visible at 1.5640.

The pound advanced to 123.99 against the yen, its strongest level since July 12. However, the pair failed to succeed above the key 124.0 level and shed almost 15-pips thereafter. The pound-yen pair is presently worth 123.89 with 124.30 seen as the next likely resistance level and 122.80 seen as the likely support.

The UK currency also reached as high as 1.5292 against the Swiss franc and 0.7858 against the euro after the data, up from session's lows of 1.5248 and 0.7881, respectively. On the upside, the pound may find target levels at 0.7830 against the common currency and 1.5340 versus the Switzerland unit.

Looking ahead, the U.S. consumer price index for July, empire manufacturing data for August, Net TIC flows for June, industrial production for July and NAHB housing market index for August are slated for release in the North American session.

The material has been provided by Instaforex Company -
TAGS: Pound  Recovers  Asian  Session  Losses  After  UK  Jobless  Rate    BoE  Minutes   

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