Sterling is recovering earlier losses after a dismal employment report and dovish minutes from the Bank of England sent the currency plummeting earlier on Wednesday morning.
UK jobless claims unexpectedly rose by 23.5k in December despite calls for a 10.0k decline and prior 9.6k pullback the month prior.
The claimant count rate was unchanged at 5.0%, as expected, as was the ILO unemployment rate at 7.8%.
Meanwhile minutes suggest that the BOE vote to leave monetary policy unchanged on Feb. 4 was unanimous, but that for some members, the decision was “finely balanced”.
Nevertheless most members agreed that the February data did not suggest that inflation would undershoot over the coming months, and consequently, that additional monetary stimulus was not necessary for the time being.
Already under pressure ahead of the releases, sterling declined an additional 24 pips on the news, touching off 1.5738 before declining global risk aversion helped recover to the current 1.5790 level.
So far today, the pair has traded in a range of 1.5738 to 1.5816. Short term resistance lies at 1.5892 with support at 1.5560.
Meanwhile, the reports sent EUR/GBP higher by 134 pips to 0.87411 before quickly retracing lower to 0.86993.
So far today, EUR/GBP has traded in a range of 0.8704 to 0.87411 today. Short term resistance lies at 0.88416 with support at 0.86580.
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