Sterling began the fresh trading week under pressure as a raft of tier 1 economic data arrives across a 3 day stint. The pound fell against the majority of its peers, pushing down to support levels against the euro and US dollar at €1.1110 and $1.25, respectively. There were no particular data points which sparked the sell-off, it was simply sentiment driven, something which has been a familiar story for anyone watching GBP over the last couple of months.
Today brings the first of 3 key releases for the Great British Pound. At 0930 the latest snapshot of the UK labour market will be released. Employment within the UK has gone from strength to strength with the best levels in 43 years recently observed. Today’s report is expected to see the unemployment level remain at the healthy 3.8% level with average earnings index steady at 3.1%. In respect to jobs – the market is anticipating a 3 months increase (from April – June) of +45K. Should the report print as expected then we should see support step into GBP to prevent any further weakness and potentially spark a short-term relief rally.
Elsewhere, it’s a big day for numbers outside of the UK. Over in the eurozone, German ZEW economic sentiment data will be closely watched while over in the US, retail sales and manufacturing/industrial production will be heavily scrutinised in the run-up to the next Fed announcement on the 31st July. Lastly, there will be a number of central bank speakers across the trading day, this is set to include both the Bank of England and Fed chiefs, Mark Carney & Jay Powell.
Written by Viv Savani. 8:32am, July 16th 2019
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