The Pound pared earlier gains Tuesday as traders responded to a mixed labour market report, which showed wage packets growing slower than was expected in February, while the unemployment rate fell to a new 42 year low.
The unemployment rate of 4.2%, down from 4.3% in the previous quarter, is the lowest since the three months to May 1975.More news: GE3, the massive asteroid that grazed the Earth on Sunday
"The pound was the standout performer yesterday and is now the best performing G10 currency versus the United States dollar on a year-to-date basis".
Sterling was flat against the euro.
Meanwhile, the United States dollar has been coming under pressure over fears of a trade war.More news: Commonwealth Games organizers under fire for closing ceremony
Several factors have supported this recent resurgence, ranging from an increased market confidence that the United Kingdom and European Union can strike a Brexit deal, to falling confidence in the agenda of US President Donald Trump, which has weakened the dollar.Britain's better than expected economic performance over the last 18 months has also helped the pound over recent months. Meanwhile, the British currency actually posted a minor loss against the Euro a year ago. Since then, inflation has fallen faster than forecast, down from 3% to 2.7%, but the outlook for wage growth has firmed.
That would also officially put an end to a year in which real wages - pay adjusted for inflation - have fallen consistently, denting the power of the consumer to spend. Central banks in many rich nations have been puzzled by the failure of wages to rise more quickly as unemployment falls, something they link to factors ranging from increased use of technology by firms to growth in the number of insecure jobs. Economists said the weaker-than-expected headline pay figure was unlikely to knock the Bank of England off course from raising interest rates next month for only the second time since the global financial crisis.
By 11:10 a.m. BST (6:10 a.m. ET), sterling was marginally lower against the dollar at $1.4313.More news: Woman Who Allegedly Took Unnao Rape Survivor to BJP Lawmaker, Arrested