Forex – Sterling Retreats from Post Brexit High after UK Jobs Report – The pound pulled back from 22-month highs against the dollar on Tuesday after the latest UK employment report showed that wage growth missed estimates, but a cost of living squeeze is still easing.

GBP/USD was trading at 1.4331 by 04:58 AM ET (08:58 AM GMT), after rising as high as 1.4377 earlier, the strongest level since the June 2016 Brexit vote.

The Office for National Statistics reported that average earnings, excluding bonuses, rose by an annualized 2.8% in the three months to February, outstripping annual inflation which dipped to 2.7% in February.

It was the first time in around a year that wages rose at a faster pace than inflation.

Earnings including bonuses also rose by 2.8% in the three months to February, missing forecasts for 3.0%, but still just above February’s inflation rate.

Indications that inflationary pressures are picking up increase the chances for a rate hike by the Bank of England next month.

The report also showed that Britain’s unemployment rate fell to a new 42-year low of 4.2%.

The UK is to release the March inflation report on Wednesday and a data on retail sales on Thursday, which will be closely watched as traders brace for a BoE rate hike in May.

Elsewhere, the pound was a touch lower against the euro, with EUR/GBP edging up 0.08% to 0.8642 from an earlier low of 0.8628.