Home Daily Commentaries Will UK unemployment data weigh heavy on the pound?

Will UK unemployment data weigh heavy on the pound?

Daily Currency Update

GBP - British PoundThis week starts with UK jobs data which could spark a reversal in the pound's recent gains, should the unemployment rate in June exceed a forecast of 4.2%.The furlough scheme is estimated to have supported the payrolls of over 9 million workers, with the Bank of England expecting the UK’s unemployment rate to hit 7.5% after a host of government support schemes are turned off.The pound may come under significant pressure should the unemployment data come out worse than expected. Further concerns lie ahead when the British government's £33.8 billion furlough scheme comes to an end in October.

Key Movers

The President of the United States signed a series of Executive Orders to extend tax breaks and unemployment benefits, eyes will be on Congress and its opinion on the legality of Trump’s orders and if they are willing to make a deal with Treasury in drafting another stimulus package. EUR/USD remains under slight pressure after a sharp fall on Friday on the back of better than expected US jobs figures. Risk-off flows tend to benefit the lower-yielding euro, especially while the U.S. dollar is under downside pressure, however, there is still a lot of market focus on fears of a second wave of COVID-19 as another round of lockdown measures could prompt a flight to safety.

Expected Ranges

  • GBP/USD: 1.2990 - 1.3122 ▼
  • GBP/EUR: 1.1075 - 1.1138 ▲
  • EUR/USD: 1.1713 - 1.1786 ▼
  • GBP/AUD: 1.8231 - 1.8280 ▲
  • GBP/NZD: 1.9780 - 1.9865 ▲