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Sterling Rises above 1.42 after UK Jobs Data

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LONDON, May 18 Reuters Versus a weaker dollar, the British pound rose to a threemonth high on Tuesday, with sentiment also boosted by jobs data showing that Britains unemployment fell between January and March.

The dollar index was at a threemonth low after Dallas Federal Reserve President Robert Kaplan reiterated his view that he did not expect interest rates to rise until next year.

Expectations U.S. interest rates would remain low helped offset concerns over rising COVID19 infections in Asia.

The pound rose above 1.42 for the first time since February in early London trading, and at 0802 GMT was up around 0.5 on the day at 1.4207.

But it was up just 0.1 against the euro, at 85.9 pence per euro.

Britains unemployment rate unexpectedly fell again to 4.8 between January and March, a period which the country spent under a tight COVID lockdown, and hiring rose further in April.

The data reinforced market expectations that Britain would see a strong economic recovery from the pandemic, helped by its fast pace of vaccine rollout and plans to ease lockdown measures.

Broadbased US dollar weakness has seen cable trade above the 1.4000level for the longest period since April 2018, wrote MUFG currency analyst Lee Hardman in a note to clients.

Our bullish outlook for the pound is based on the assumption that the UK economy will bounce back strongly, so we will need to monitor the latest COVID developments closely as they potentially pose downside risks.

Stuart Cole,…

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