The pound ended a six-day gain versus the euro before the Bank of England releases minutes of its June meeting when policy makers voted to keep interest rates at a record low. Sterling halted a three-day advance versus the dollar before a report economists said will show the U.K. unemployment rate stayed at the least in seven years in the quarter through April. The BOE minutes will show if the decision to maintain the key rate at 0.5 percent, where it has been since March 2009, was unanimous and whether certain members of the Monetary Policy Committee were moving closer to voting for a 25 basis-point increase. “The labor numbers are important,” said Richard Falkenhall, senior currency strategist at SEB AB in Stockholm. “We have got to see signs that wage pressure is improving in the U.K.” before the BOE can tighten policy, he said. The pound weakened 0.1 percent against euro to 1.3880 this morning. It appreciated 2.3 percent versus the common currency over the previous six days and reached 1.3935 yesterday, the strongest level since June 1. Sterling was little changed at $1.5642. The U.K. jobless rate, as measured by International Labour Organisation standards, was 5.5 percent in the three months through April, the Office for National Statistics will say, according to market consensus. It hasn’t been lower since June 2008. A government report will show jobless claims fell by 13,800 in May, according to market analysts
The euro was little changed this morning as tensions over Greece continued while the dollar ticked higher ahead of the Federal Reserve’s upcoming monetary policy statement later in the trading day. EUR/USD was steady at 1.1247, off yesterday’s highs of 1.1329. The euro weakened on Tuesday amid mounting concerns over the approaching deadline for Greece’s repayments to the International Monetary Fund. Europe wants Greece to make spending cuts worth €2 billion in order to secure a deal that will unlock additional funds before its bailout expires at the end of June and it must repay €1.6 billion to the IMF. A default by Greece could lead to the country’s exit from the euro area. But comments by Prime Minister Alexis Tsipras on Tuesday in which he accused the county’s creditors of trying to “humiliate” Greece with more cuts indicated that Athens is sticking to a hard line in negotiations. The single currency was also hit after data showed that the closely watched ZEW German investor sentiment index deteriorated sharply this month, hit by uncertainty over Greece’s future in the euro zone.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained 0.13% to 95.22 amid mixed U.S. housing data. In a monthly report, the U.S. Department of Commerce said the number of building permits for future home construction surged nearly 12% to an eight-year high at 1.28 million units. Although monthly housing starts dipped 11.1% to 1.04 million units, the Commerce Department upwardly revised an already robust figure from April to 1.17 million units. While the Fed has indicated that it could raise interest rates following the end of today’s June meeting, it is more likely that the U.S. Central Bank will wait until September before lifting rates for the first time in nearly a decade. The Fed would like to see significant improvements in wage and GDP growth, along with indications that inflation is moving toward its target goal of 2% before it raises its benchmark Fed Funds Rate above its current level of zero to 0.25%. Since its last meeting, the U.S. economy added 280,000 jobs in May while hourly wages rose significantly by 0.3%. Retail sales, meanwhile, a closely watched metric, surged by 1.2% last month, fuelled by increases in motor vehicle and gas sales.