Labor market data in the UK today shows that the country's economy is at or near full capacity in record employment.
Basic wage growth has accelerated to nearly 10-year high, and unemployment has fallen to its lowest since 1975.
Under normal circumstances, these data should force the Bank of England raise interest rates in order to combat the risk of inflation. But right now, traders estimate the likelihood of UK interest rate cuts by the end of 2019 at just 60% due to growing fears that the country's exit from the EU will be without agreement.
This suggests that perhaps the upward impulse will give a better price for new GBP short positions.
Source: Bloomberg Finance L.P.
Charts: Used with permission of Bloomberg Finance L.P.
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