The British pound is climbing after the latest data showed that UK unemployment dropped below 5%.
The currency is up by 0.4% at 1.3168 against the dollar as of 7:26 a.m. ET.
The Office for National Statistics showed that UK unemployment fell to 4.9% for the three months to May, the lowest since 2005. Additionally, the number of employed people hit 31.70 million, the highest on record.
It’s worth noting that this data was collected before the Brexit vote.
“Although sterling and interest rates have not fully recovered from the Brexit decision, equity markets have, and fear of contagion has died down,” wrote Marc Chandler, the global head of currency strategy at Brown Brothers Harriman.
As for the rest of the world, here’s the scoreboard this morning:
- The Turkish lira is little changed at 3.0415 per dollar. Notably, Turkish president Recep Tayyip Erdogan will chair a meeting today of the National Security Council and then will announce an “important decision.” “Markets have reacted badly to the ongoing purges of the judiciary, military, police, and academia. If Erdogan announces more draconian measures, we suspect that USD/TRY (which made a marginal new high for this move) will likely make new all-time highs,” argued Chandler.
- The South African rand is stronger by 0.4% at 14.2855 per dollar after the country’s CPI rose to 6.3% year-over-year in June, as expected. ” Nonetheless, the weakness of the economy, coupled with the recent rise in the rand, means that interest rate hikes are off the table in the near term (including at tomorrow’s MPC meeting),” argued Capital Economics’ senior emerging markets economist William Jackson in a note.
- The US dollar index is little changed ahead of a quiet data day. The Department of Energy’s release of crude oil inventories will be out at 10:30 a.m. ET.
- The euro is little changed at 1.1007 against the dollar. The ECB meets on Thursday.
- The Japanese yen is weaker by 0.4% at 106.54 per dollar. The Bank of Japan meets next week.
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