US jobs figures put pressure on the US dollar
Daily Currency Update
GBP - British Pound
Yesterday saw the pound benefit later in the day as US private firms hired far fewer employees than expected. Economists had anticipated over 600k jobs to be added in the private sector but only 374k were added as the Delta variant continues to bite across the US and slow the country's recovery.
This move saw the pound make another run towards GBP/USD 1.3800 yesterday. This barrier could be hurdled come Friday as we get another (larger and more significant) update on the US labour market in the form of Non Farm Payroll figures.
Closer to home it wasn't all plain sailing for the pound though as factory growth dipped last month in the UK. This all centres around the story of supply chain issues running through the UK and where the effects are now being felt by UK consumers as amongst others Wetherspoons reported a shortage of beer.
Key Movers
Ahead of Friday's latest US Non Farms jobs figures it’s important to understand why this is significant. These jobs reports could help determine when the Federal Reserve will begin tapering its asset purchasing programme and each time these numbers miss the forecasts the expectations for any tapering moves could be pushed back. This in turn can drive the US dollar lower, something that we can see on the EUR/USD cross which has gained over the last four days.One currency benefiting from this US dollar weakness though in particular in the Aussie dollar which was in fact one of the markets strongest currencies. The Aussie was partly helped by the buoyant Q2 GDP figures which beat forecasts yesterday, but any recent gains for the currency could be eroded with the RBA meeting next week and the current lockdown restrictions affecting the recovery.
Expected Ranges
- GBP/USD: 1.3730 - 1.3810 ▲
- GBP/EUR: 1.1620 - 1.1670 ▼
- GBP/AUD: 1.8650 - 1.8720 ▼
- EUR/USD: 1.1790 - 1.1860 ▲