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GBP/USD could hold steady
Yesterday the UK inflation rate unexpectedly jumped up to 1.9%, only a fraction away from the targeted 2% level. Today we have seen confirmation that the UK unemployment rate is at 6.5%, still a little too high but edging towards levels that will need to be hit in order for the Bank of England to feel confident about raising interest rates.
One statistic that is not falling into place is the UK average earnings, which grew at 0.3% below the expected 0.5%. Due to the heavily indebted nature of the UK population towards mortgages, an improvement in earnings will need to be seen in order to make up for the extra repayments that would be a result of increased interest rates.
This probably goes some way to explaining why we have not seen more of a climb from GBP/USD.