Daily Currency Update
GBP/USD drifted higher yesterday as dollar weakness permeated the financial markets. GBP/USD approached 1.22 however lost momentum ahead of the key level before retracing. The only domestic data release of note was Septembers Construction PMI reading which missed target by some distance. With borrowing costs at a 15 year high the survey was depressed to 45 when 50 was forecast. The Bank of England's aggressive interest rate hiking cycle enacted over the past two years has pushed mortgages to a 15 year high and the extra costs are now clearly impacting the sector. GBP/USD is currently around 1.2190 as markets await the monthly US employment data.
Key Movers
Lunchtime today sees Septembers US jobs report with the headline Non-Farm Payroll's figure expected to show 171k people were added to the workforce last month. If we see an overshoot in the number it will add weight to the argument that the Federal Reserve needs to raise rates another 25bp hike to head off a potential second wave of rising inflation. The report will also see wage growth data and unemployment levels updated with the latter predicted to drop to 3.7% from 3.8%. This morning has seen German Factory Orders climb to 3.9% m/m, higher than predicted and an encouraging sign that the Eurozone's powerhouse economic woes may have bottomed off. EUR/USD is currently at 1.0550.
Expected Ranges
- GBP/USD: 1.2100 - 1.2300 ▲
- GBP/EUR: 1.1485 - 1.1610 ▲
- GBP/AUD: 1.9070 - 1.9230 ▲
- EUR/USD: 1.0460 - 1.0615 ▲