The pound rose versus its major counterparts, reaching the strongest level since January against the euro, as data showing the U.K. jobless rate unexpectedly dropped in July boosted demand for Britain’s currency.
The pound advanced as U.K. unemployment fell in the three months through July, moving a step closer to the 7 percent threshold at which Bank of England Governor Mark Carney has said officials will reassess their policy stance. Australia’s dollar fell from a seven-week high versus the U.S. currency before a government report tomorrow that economists said will show the nation’s jobless rate increased in August. The yen advanced against all but two of its 16 major peers.
“The unemployment report was really positive” for the pound, said Eimear Daly, a currency-market analyst at Monex Europe Ltd. in London. “The markets have just run with it. Right now the data is acting against Carney. The very policy he created is egging markets to price in an early rate hike.”
The pound gained 0.2 percent to 84.17 pence per euro at 10:44 a.m. London time after reaching 83.83 pence, the strongest level since Jan. 23. The U.K. currency rose 0.2 percent to $1.5763 after touching $1.5827, the highest since Feb. 8.
Britain’s unemployment rate measured by International Labour Organization methods declined to 7.7 percent from 7.8 percent in the second quarter, the Office for National Statistics said in London. The median forecast of 28 economists was for 7.8 percent.
The dollar snapped a three-day decline versus the euro before Federal Reserve Bank of New York President William C. Dudley speaks tomorrow amid forecasts U.S. policy makers are moving closer to slowing bond purchases.
The dollar was little changed at $1.3267 per euro after dropping 1.1 percent during the previous three days. The U.S. currency fell 0.2 percent to 100.25 yen. The yen climbed 0.1 percent to 133.01 per euro after depreciating to 133.38, the weakest level since May 22.
Dudley said in July that economic growth will probably quicken next year, possibly warranting a reduction in bond purchases. The Fed is forecast to slow its monthly buying to $75 billion from the current $85 billion pace at its Sept. 17-18 meeting, according to the median estimate of economists surveyed by Bloomberg News on Sept. 6.
“There’s definitely some consolidation going on,” said Kasper Kirkegaard, a senior currency strategist at Danske Bank A/S (DANSKE) in Copenhagen. “We have to wait until the Fed’s meeting next week for the next real catalyst.”
Australia’s dollar fell 0.1 percent to 93.05 U.S. cents after strengthening to 93.19 yesterday, the highest level since July 24.
The nation’s jobless rate rose to a four-year high of 5.8 percent last month, from 5.7 percent in July, according to the median estimate of economists surveyed by Bloomberg News before tomorrow’s report.
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