The euro/dollar rose to 1.1291. As a consequence, the euro corrected to 1.1260 on the back of a fall in the euro/pound cross. The upward impulse for the British pound came from labor market data from the UK and the Bank of England’s minutes.
The unemployment level in the UK remains low at 5.5%. The number of unemployed fell by 43,000 to 1.81 million. Wages increased by 2.7% in terms of a year on year value.
The Bank of England’s minutes showed that the members of the monetary policy committee voted for the policy to be left as it was. The minutes state that growth inhibiting factors have started to wane. Any increase in interest rates will be gradual.
The pound/dollar rate over the course of two hours increased to 1.5747. The growth was an addition of 114 points and interest in the pound still remains. As for the euro, it’s not even managed to react to the inflation data which came out after the Bank of England’s minutes. The Eurozone May CPI is unchanged at 0.3% in comparison with April’s 0.3% and a forecasted 0.3%.
Trader attention has now switched over to the outcome of the FOMC’s meeting in the USA. At the end of the meeting, Janet Yellen will give a speech. Whether she will be able to get the market moving is unknown.
The pound/dollar is trading around the upper limit of the MA (U3) on the hourly timeframe. This means that by 21:30 EET, the pound/dollar could roll back to the 1.5680-1.5700 zone. It is a comfortable zone where it can wait out the results of the FOMC meeting. If the euro/pound cross rate doesn’t switch direction, the euro/dollar will keep trading in the region of 1.1235-1.1260 until the evening. If it recoils then it’ll be in the 1.1250-1.1280 zone.