The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
Sterling appears to have found its footing so far this morning however, with GBP/EUR flat at €1.1627 and GBP/USD stable at $1.3750. GBP/CAD is rangebound at C$1.7116, while GBP/AUD and GBP/NZD are holding steady at to AU$1.8445 and NZ$1.9766 respectively.
In the spotlight today will be the latest US payroll figures. Could another underwhelming payroll report send the US dollar lower this afternoon?
What’s been happening?The pound got off to a poor start yesterday, with a weaker-than-expected manufacturing PMI and some dovish comments from BoE Governor Andrews Bailey, sapping Sterling sentiment.
However GBP exchange rates recouped a small portion of these losses later in the day, after Boris Johnson expressed his optimism that England will be able to lift the majority of coronavirus restrictions on 19 July.
The euro, meanwhile, firmed on Thursday after the Eurozone’s own manufacturing PMI printed above expectations, with subsequent support for the single currency coming in response to a broad pullback in the US dollar during the European trading session.
This downturn in USD exchange rates was attributed to some profit taking by investors at the start of the third quarter.
Further undermining the US dollar was the publication of the ISM manufacturing PMI, which reported US factory activity slowed at a slightly faster-than-expected pace last month.
What’s coming up?Acting as the main catalyst of movement in currency markets today will undoubtedly be the publication of the latest US payroll figures.
Wednesday’s upbeat ADP employment figures has helped to bolster expectations going into this afternoon’s release.
However, the correlation between the ADP and payroll figures has grown inconsistent in recent months, and the US dollar could face some significant pressure if June’s payroll figures print below expectations for the third consecutive month.
Meanwhile, in the absence of any notable GBP data releases, UK coronavirus statistics are likely to determine the direction of the pound today, leading to the currency weakening further if cases continue to climb at a worrying pace.
Eurozone data is also thin on the ground today, potentially leading to the single currency trending lower amidst rising concerns over Europe’s coronavirus situation.
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)