GBP Path to $1.60

More declines in UK unemployment lift GBP to 7-month highs. Unlike previous episodes of pronounced strength when the currency was boosted by a general advance in risk-on dynamics (robust market optimism, improved growth in G5 and BRICS) the current phase of sterling rally is primarily driven by UK-specific factors across manufacturing, construction and services sectors. The marked improvement in labour markets fails to have any notable impact on wages but maintains market rates at 2-year highs. See latest Chart & Analysis

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