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Forex pairs in this Article » GBP/USD, EUR/GBP (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observed the strong perspective for the sterling.

Key Quotes

"The pound has strengthened following the release of another robust UK employment report. The report revealed that employment increased by 280k in the three months up to the end of November 2013 and unemployment decreased by 167k which lead to the unemployment rate dropping sharply by 0.3 point to 7.1%."

"It looks highly likely that the BoE’s 7.0% unemployment rate threshold will now be met at the end of last year or early this year. As a result it appears even more likely that the BoE may become the first major central bank to raise its key policy rate which may come as early as late 2014 rather than in early 2015."

"The BoE even noted for the first time in the latest MPC minutes that the pace of future rate hikes will only be gradual highlighting that policy discussions over the potential need to raise rates ahead are gathering pace."

"The strengthening pound trend has been reinforced further with the probability increasing that GBP/USD will rise towards 1.70 and EUR/GBP fall closer towards 0.75 in the year ahead."
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