LONDON: Sterling rose on Tuesday after data showed British basic wages grew at a record pace, adding to the Bank of England’s inflation worries, while the yuan sank to a nine-month trough after China’s central bank unexpectedly cut key policy rates.
In contrast, the Russian rouble gave up early gains after Russia’s central bank lifted its key interest rate by 350 basis points to 12% at an emergency meeting to try and halt the currency from weakening past 100 to the dollar after a public call from the Kremlin for tighter monetary policy.
The pound was last 0.2% higher at $1.2705, after rising as high as $1.2731 following data showing British wages excluding bonuses were 7.8% higher than a year earlier in the three months to June.
Read more: Russian ruble plunges past 100 against dollar for first time since March 2022
That represented the highest annual growth rate since comparable records began in 2001.
The UK unemployment rate, however, unexpectedly rose to 4.2% from 4.0%, but money market traders still expect the Bank of England to raise rates by at least 25 basis points next month on worries high pay growth will lead to second round effects on inflation.
“BoE Sep rate hike bets have jumped … providing support for the GBP,” said Scotiabank chief FX strategist Shaun Osborne.
