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UK Job Data and Brexit Hopes Prolong Sterling’s Bullish Week

Pound News: UK Job Report Supports Sterling despite Political Uncertainty

Britain’s July job market report beat expectations in some key prints yesterday, helping the Pound (GBP) to hold its ground despite concerns over a narrowing labour market.

News that the British government is willing to negotiate a new deal with the European Union failed to offer much additional support to Sterling as investors remain sceptical Prime Minister Boris Johnson will follow through.

Sterling’s potential for gains remain limited as Johnson’s refusal to comply with legislation passed through the House of Commons – which requires he seek an extension to the October 31 deadline – suggests his hard-line stance on a no-deal Brexit remains unyielding.

With a lack of data due for publication today, political developments will remain in focus.

 

Euro News: Euro Losses Limited by Hopes for a German Stimulus

The Euro (EUR) was relatively steady yesterday following news that Germany intends to introduce fresh fiscal stimulus in an attempt to jump-start its own economy. Speculation the European Central Bank (ECB) may be less dovish than analysts predict in its Thursday monetary policy announcement also helped to stabilize the single currency.

No notable Eurozone data will be published until German inflation stats come in tomorrow morning. Investors are likely to sit on their hands until tomorrow’s ECB decision.

 

US Dollar News: USD Steadies amid Questions over Federal Reserve Interest Rate Cuts

The Pound failed to climb as high against the US Dollar (USD) yesterday. Following days of losses on improved risk appetite, the safe-haven US Dollar steadied with investors reconsidering forecasts for a Federal Reserve interest rate cut.

Today will be another quiet day in the US economic calendar, but tomorrow’s US inflation rate for August could cause Fed rate cut bets to rise again if the stats disappoint.

 

Canadian Dollar News: CAD Losses Limited as Bank of Canada (BoC) Rate Cut Bets Remain Low

Yesterday’s Canadian housing stats exceeded expectations, bolstering speculation the Bank of Canada (BoC) will continue to delay interest rate cuts. The Canadian Dollar (CAD) was more appealing than other trade-correlated currencies as a result.

Canadian capacity utilisation data will be published today, but CAD investors are more likely to focus on shifts in global trade-sentiment.

 

Australian Dollar News: Poor Australian Business Confidence at Odds with RBA Outlook

The Australian Dollar (AUD) was one of yesterday’s worst performing major currencies. Reserve Bank of Australia (RBA) interest rate cut speculation flared again when Australia’s August business confidence report from NAB unexpectedly slowed to just 1. The data cast doubts over the RBA’s confidence in Australian economic resilience.

Reaction to this morning’s Australian consumer confidence report from Westpac could clarify whether the RBA’s outlook missed its mark.

 

Upcoming Data

Wednesday, 11th September

01:30    Australian Westpac Consumer Confidence

13:30    US PPI

15:00    US Wholesale Inventories

 

Alastair Archbold
Currency Trader
T: 01442 892 062

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