The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
Meanwhile, trade in the pound is mixed so far this morning, with GBP/EUR subdued at €1.1724 and GBP/USD slumping to $1.3794. GBP/CAD is rangebound at C$1.7413, while GBP/AUD and GBP/NZD jump to AU$1.8941 and NZ$1.9960 respectively.
Looking ahead, despite an upbeat UK jobs report, Sterling looks to face an uphill battle today.
What’s been happening?The US dollar opened this week’s session on the front foot, with the safe-haven currency clawing back some of Friday’s losses, amidst a prevailing risk-off mood.
This slump in market sentiment came on the back of weaker-than-expected Chinese data, as well as elevated geopolitical uncertainty.
However, the US dollar’s gains were tempered somewhat by an underwhelming Empire State manufacturing index.
This upside in the US dollar came at the expense of the euro due to the strong negative correlation between the pairing, although the single currency’s losses were capped by Europe’s improving coronavirus situation.
Meanwhile, the pound was mostly rangebound through yesterday’s session, with the currency receiving some modest support as new isolation rules came into effect in England, bringing an end to the ‘pingdemic’.
What’s coming up?Kicking off today’s session was the publication of the UK’s latest jobs report.
June's data revealed that unemployment fell back again at the end of the second quarter as more businesses reopened.
Despite the data also reporting another sharp rise in UK wage growth over the same period, the pound is struggling to attract support this morning.
For EUR investors the primary focus this morning will be on the Eurozone’s latest GDP estimate. Today’s data is expected to confirm that the bloc’s economy expanded by 2% in the second quarter, but any reading exceeding this could help to bolster the appeal of the euro.
Across the pound the spotlight will be on the latest US retail sales release. Will a contraction of sales growth last month slow the US dollar ascent?
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)