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By Ritvik Carvalho
LONDON, April 12 Britain's pound rose against
the dollar on Wednesday, after data showing
stronger-than-expected wage growth brought some relief to
investors concerned about the economic impact of Britain's
decision to leave the European Union.
Workers' total earnings including bonuses rose by an annual
2.3 percent in the three months to February, unchanged from the
previous period and beating economists' expectations. The
unemployment rate held steady at an almost 12-year low of 4.7
percent, in line with forecasts.
Sluggish wage growth has been cited as one reason the Bank
of England is in no hurry to raise interest rates despite
inflation holding steady above its 2 percent target for a second
Sterling touched $1.2521, its highest level in nine days,
after the data, last trading 0.1 percent higher on the day at
It hit a six-week high versus the euro in the London
afternoon, but reversed those gains to trade flat on the day at
84.88 pence per euro.
Lee Hardman, currency strategist with MUFG in London, said
the pound was in a consolidation phase for the near term and
that economic data was having less of an impact on the currency
since last year's Brexit vote.
"If that's going to change, it's only...if the data prompts
the Bank of England to shift their policy stance," Hardman said.
"Unless we see stronger wage data or other kinds of upside
risks to inflation developing, then they're likely to stay on
hold for now so that is not enough to trigger any kind of upside
risk for the pound in the near term."
Sterling also recouped some overnight losses against the
safe-haven yen, last trading almost flat at 136.93 yen per
pound. It was over 1 percent lower against the Japanese currency
on the week.
The pound fell to four-month lows versus the yen on Tuesday,
as a risk-averse mood - fuelled by worry over U.S. involvement
in North Korea and Syria - swept through financial markets.
"The boost in the pound wasn't just because of the labour
market data...but there's also been a reduction in risk-aversion
(in Europe)," said Kathleen Brooks, research director at City
(Editing by Louise Heavens; editing by Susan Thomas)