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LONDON, Sept 14 Sterling dipped on Wednesday,
shedding early gains made on data that showed resilience in
Britain's labour market as investors concluded the numbers did
little to change expectations that monetary policy will remain
The jobless rate in the three months to July was 4.9
percent, unchanged from the three months to June while the
number of people in work rose by 174,000, the Office for
National Statistics said.
But growth in wages slowed, possibly signalling tougher
times ahead for households just as they face the prospect of
higher inflation after the post-Brexit vote fall in the value of
the pound, which will push up the cost of imported goods.
Also the number of unemployment benefit claimants -
considered a potential early warning sign of an economic
downturn - rose by 2,400 to 771,000 in August.
Sterling initially rose to $1.3222 from $1.3200
before the data was released, but weakened in afternoon trade to
$1.3139, its lowest in two weeks and down 0.3 percent on the
The euro was up 0.4 percent at 85.40 pence.
"Sterling is looking wobbly after indifferent UK earnings
and claims data and is in danger of a further plunge," said John
Hardy, head of currency strategy at Saxo Bank.
The pound has broadly stabilised in the past month, holding
above $1.30, but more political noise is likely to be generated
when European Union leaders meet on Friday in Bratislava, where
conditions for Britain's departure from the bloc will be high on
David Davis, the minister London has tasked with leading the
Brexit negotiations, said on Monday that Britain will make its
guidelines for talks on leaving public by the time it triggers
the formal exit process.
"It seems that sterling has become increasingly sensitive to
domestic data with more explosive movements expected as
investors ponder the impacts of Brexit," said FXTM analyst
Lukman Otunuga. "Although the string of positive data in recent
weeks provided somewhat of a lifeline to sterling bulls, the
lingering Brexit anxieties continue to cap gains."
The pound hit a seven-week high of $1.3445 a week
ago, more than 5 percent above the three-decade low plumbed in
July soon after the EU referendum, as investors trimmed record
short positions against the currency.
But since then, with BoE Governor Mark Carney leaving the
door open to more monetary easing, sterling has shed nearly 2
The BoE, which makes a policy announcement on Thursday, is
not expected to introduce new measures, having last month cut
interest rates to record lows and reintroduced an asset-purchase
(Reporting by Anirban Nag and Patrick Graham; Editing by Raissa
Kasolowsky and John Stonestreet)