GBP: Sterling holding up well
EUR: Out of mind until next week
USD: Jobs numbers due at 13.30
Sterling
The pound has done well in the face of a resurgent dollar with upgrades to business sentiment surveys showing higher orders, increased employment, and higher costs for companies in manufacturing, construction, and the services industries; I’d be interested to know if you are experiencing the same.
Changes to UK travel rules yesterday are being seen as a way the government can keep things on track at home – limiting the potential spread of new variants and keeping everything on track for the announcement of a reopening on June 21st – and did not dent sterling too much.
GBPUSD could end up back in the 1.40s this afternoon should today’s job numbers hammer home the recovery narrative stateside.
Euro
The single currency was not the focus yesterday and will not be today. Next Thursday’s ECB meeting will draw market eyes back to Europe but for now, the dollar will govern what the euro does.
US dollar
Today is a big day with the release of Friday’s non-farm payrolls set to force the tone within which financial markets will likely trade for the next month. It happened in May with a weak dollar persisting and we expect FX to pull the same trick again.
Following yesterday’s stronger than expected ADP number, market expectations for the number at 13.30 this afternoon have elevated from around 650,000 to 675,000 with more recent estimates as high as 800,000. We would need to see something beginning with an 8 or a 9 today for a strong USD move, especially if last month’s figures remain unrevised from their huge miss.
Expect things to be quiet this morning and then all hell to break loose once the figure is announced. We maintain our one-month target on GBPUSD at 1.44.
Elsewhere
It is also jobs day in Canada today and while a cut in employment is expected given tight lockdown procedures in the country at the time, any sign that the economy held on to jobs will allow for CAD improvement.
Market rates
Today’s interbank rates at 08.22 against sterling. Movement vs yesterday.
| Euro | €1.164 ↑ |
| US dollar | $1.410 ↓ |
| Australian dollar | $1.839 ↑ |
| South African rand | R19.25 ↓ |
| Japanese yen | ¥155.4 ↓ |
Have a great day and a better weekend.
