Sterling has risen close to 5-week highs against the dollar on this morning’s upbeat jobs data, reports James Warrington.
The pound traded as much as 0.3pc higher at $1.3875 after the ONS figures were released, closing in on highs of $1.3890 reached on 3 September.
Sterling has fluctuated in recent weeks as investors take stock of key signals about economic recovery and how they may affect the Bank of England’s verdict on interest rates.
But it gained ground this morning as statistics showed the number of employees on company payrolls rose a record 241,000 in August, while vacancies rose above 1m for the first time ever.
Against the euro, the pound was 0.2pc higher at 85.20 pence per euro, close to the 3-week high of 85.11 pence hit on Monday.
“Sterling is doing well this morning after promising UK labour market data, which showed payrolled employment having now eclipsed its pre-pandemic level, and another pleasing fall in the unemployment rate,” said Michael Brown, senior market analyst at Caxton FX.
“GBP is also likely finding support as a result of signs of increasing wage pressures – vacancies at an all-time high, and earnings continuing to increase at a rapid clip – which may be causing market participants to bring forward their expectations of a BoE hike. Steadier global risk appetite, with signs of equity dip buyers beginning to emerge, will also be helping the high beta GBP.”