Wednesday’s trading session kept in line with the current FX market trend. The US dollar had a poor session which saw it sold across the board. The pound traded and closed comfortably above $1.31 while the EURUSD pair tapped $1.19 and closed just below. Soft economic data and concern over the US’ recovery were the key drivers.
US private-sector job growth in July was shockingly low. The market consensus for 1.5 million new jobs was far too ambitious. It turns out only 167K jobs were created across the sector in July, significantly short of expectations. The US dollar remained on the back foot throughout Wednesday’s session. This release gives further importance to Friday’s non-farm payroll data, a report which combines both private and public sector employment. Many USD bulls will be nervous about this data point given the concerning numbers in the private sector.
Today’s highlight has been the Bank of England’s monetary policy announcement and quarterly inflation report. The Bank left interest rates on hold at 0.10%. They said the outlook for the UK and global economies remains unusually uncertain. They will continue to monitor the situation closely and stand ready to adjust monetary policy accordingly. The pound is a touch higher as European trade kicks off. We still have a press conference with Governor Bailey to monitor at 12.30 which could well be a market-mover.
Written by Viv Savani. 9:26am, August 6th 2020
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