UK wage data beat expectations, which lifted sterling. However, the pair GBP/USD could return below 1.21 after the release of the Consumer Price Index (CPI) US, ING economists report.
Sticky wages underpin expectations for Bank of England rate hike in March
“The Bank of England’s preferred measure of wage growth, the quarter-on-quarter annualized change, has been consistently above 7% for a few months now, and there is very little evidence of the wage slowdown suggested by some surveys”.
“Tomorrow’s CPI release will be another key event for the pound, but we believe that given the Bank of England’s increased focus on wage dynamics, today’s data strongly supports a 25bp rate hike in March (which is our base case).”
“He EUR/GBP could break below 0.8800 this week, while the GBP/USD could fall back below 1.2100 after the publication of the US CPI.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
