USD led by Labour data
Daily Currency Update
US unemployment claims was the only macroeconomic data of note yesterday. Weekly claims saw an uptick from the previous release but came under forecast at 220k. It has been a week of labour data from the US, but all have been building up to the key releases today as we see non-farm employment change and the latest unemployment rate. Employment change is expected to pick up from the previous release (184k forecast), while unemployment is set to see no change (3.9%). As there is little data elsewhere, it will be this and any further communications from central bank members about policy that will sway currencies today.GBP/USD continue to trade above 1.2500, falling short of breaking 1.2600 at the time of writing. GBP/EUR remains in a tight range, jumping between 1.1650 and 1.1690. EUR/USD has dipped below 1.0800, currently trading just under this figure.
Key Movers
There has been early inflation data from the UK and Europe this morning. German inflation eased in November, bolstering the case for a peak in eurozone interest rates. There has been rising expectation that the European Central Bank will start cutting interest rates next year and this morning’s data will have supported this sentiment. The UK survey of around 2,000 people showed they expect goods and service costs will fall. A median answer of 7.5% for the current rate of inflation was down from 8.6% and 3.3% for the year versus the previous 3.6%. Although these are recognised as smaller impact data for the currency market, these are small indicators as to what next moves the bank will make with rate policy.Expected Ranges
- GBP/USD: 1.2540 - 1.2660 ▲
- GBP/EUR: 1.1640 - 1.1690 ▲
- GBP/AUD: 1.8920 - 1.9180 ▼
- EUR/USD: 1.0750 - 1.0830 ▲