The movements that the pound sterling made relative to the U.S. dollar on Nov. 26 illustrated the key role that the strength of the U.K. economy plays in the exchange rate for this pair.
Individuals who want to make money by trading current pairs such as the GBP/USD might benefit from knowing about this potentially helpful information.
GBP/USD nears one-month high amid strong data
The release of strong economic data for the United Kingdom coincided with the exchange rate for these two currencies rising to $1.6190, according to Reuters. As a result, the GBP/USD came close to the one-month high of $1.6241 that was reached on Nov. 25.
This key measure was pushed higher when market participants responded to a survey which indicated that hiring in the European nation has surged recently, and that British employers are planning to step up these staffing initiatives, the media outlet reported. The poll, which was released overnight, indicated that the pace of hiring enjoyed by service firms in the United Kingdom recently surged to its highest in six years.
Later in the day, the GBP/USD pair dipped slightly after Bank of England Governor Mark Carney indicated that interest rates will not automatically be pushed higher if the nation's jobless rate reaches 7 percent, according to Investing.com. He indicated that while this level will have to be reached for these borrowing costs to rise, hitting this particular measure may not result in a rate hike.
"The exact timing of when that 7 [percent] threshold will be achieved is subject to uncertainty. We do our best to give our estimates of that uncertainty … One month's unemployment figures does not have a material change on those likelihoods," Carney stated in testimony before the Treasury committee on the parliament, the media outlet reported.
Carney optimistic about British economy
The BOE official indicated his optimism surrounding the nation's economy, stating that "all the elements" were present so that it could improve, according to the news source. He noted that the recent decline in the nation's jobless rate to 7.6 percent represented a positive development.
Amid all these developments, one market expert in particular indicated that the British Pound looks strong according to technical analysis, Reuters reported.
"If you look at the major currencies, sterling is the most reliable," Nawaz Ali, market analyst at Western Union Business Solutions, told the news source. "It is running into technical resistance … But right now you can't short sterling."
Individuals who want to make money by trading the GBP/USD might benefit from knowing about this analysis, as well as the impact that the latest economic news has had on the currency pair.
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