The sterling traded steadily in proximity to its highest level in seven months against the US dollar on Friday, as UK construction data was in sight and it could add to expectations that Bank of England (BoE) may consider a raise in the benchmark rate sooner than anticipated.
GBP/USD reached a session high at 1.5813 at 8:16 GMT, also the pairs highest since early February. Support was likely to be received at September 11th low, 1.5717, while resistance was to be met at 1.5840.
British pound reached a seven-month high against the US dollar on Thursday as Bank of England Governor Mark Carney said that the central bank’s forward guidance policy was providing support to economic recovery. On Wednesday the International Labour Organization (ILO) reported that unemployment rate in the United Kingdom decreased to 7.7% during the period May-July from 7.8% during the preceding three-month period. Unemployment rate in the UK approached the targeted level by Bank of England, at which the bank could begin tightening its monetary policy. The above mentioned drop in the number of unemployed people in the country might urge the central bank to raise the benchmark interest rate sooner than it had previously indicated. In August BoE pledged to maintain interest rates on hold at current record low level until the unemployment rate plunges below 7%. However, that was something not appearing on the horizon in another three years.
Additionally, the index of construction output in the United Kingdom may rise by 2.1% in July, after decreasing 0.7% in June, according to a median forecast of experts, participated in a Bloomberg News poll.
Meanwhile, the Federal Reserve Bank is expected to decelerate its monthly asset purchases to 75 billion USD from the current pace of 85 billion USD at its September 17-18th meeting, according to the median estimate of experts, surveyed by Bloomberg News on September 6th.
Elsewhere, the pound was slightly lower against the euro, with EUR/GBP cross dipping 0.05% on a daily basis to trade at 0.8412 at 8:41 GMT. GBP/JPY pair was gaining 0.11% to trade at 157.56 at 8:44 GMT. Ultimately, the sterling has appreciated 7.1% in the past six months, or the best performing currency among the 10 developed-nation currencies, tracked by Bloomberg Correlation-Weighted Indexes. US dollar has gained 0.6%, while the euro has risen 3.3%.
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