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Sterling slips ahead of wage growth data

GBP - British Pound

GBP/USD's brief recovery above the 1.25 handle has come to an end this morning with the big number breached once again as Brexit concerns and a firmer dollar push cable lower. GBP/EUR is also lower falling through the key 1.1111 level (which indicates market convention EUR/GBP breaking above .90). There doesn't appear to be any new headlines forcing the moves rather just fragile market sentiment seeing sterling slip. Today sees the start of a key week of UK data, some of which in normal circumstances wouldn't look too bad. At 9:30am we have UK wage growth numbers for March-May 2019 compared to a year earlier. Including bonuses pay rises are expected to hold steady again showing a 3.1% increase well above the 2% level of inflation which is also expected to hold steady when the latest numbers are published tomorrow. The one fly in the ointment is predicted to be Thursday's Retail Sales figures with a moderated drop from -0.5% to -0.3% pencilled in as consumers reign in spending amidst Brexit uncertainty.

Obviously the markets will be keenly awaiting comments re: the UK's departure from the EU when the next leader of the Conservative Party and British PM is announced with Boris Johnson looking all but certain to land the job.

Bank of England Governor, Mark Carney is due to take part in a panel discussion in Paris at lunchtime however it is unlikely he will comment on monetary policy.

Key Movers

The dollar is former across the board this morning as the chances of the Federal Reserve cutting rates by 50bp at the end of this month recede after some upbeat data yesterday afternoon. The monthly Empire State Manufacturing Index, produced by the New York Fed rose from -8.6 to 4.3 higher than expected. Business's surveyed were seen to be more optimistic about the outlook over the next six months compared to the previous survey as confidence over a potential rate cut from the Fed to bolster the economy buoyed sentiment.

Eurozone data kicks off today with the monthly German ZEW Economic Sentiment survey expected to drop even further into negative territory from -21.1 to -22.1. The ongoing trade war between the US and China is hitting factory output in the EZs largest economy hard with the closely followed report expected to highlight this yet again.

Voting on the next EU Commissioner is due to take place later today with MEPs deciding on whether to approve German Defence Minister Ursula Von der Leyen's as Jean-Claude Juncker's replacement when his five year term comes to an end on November 1st.

Overnight saw the release of the minutes from the latest Reserve Bank of Australia's interest rate decision. Little movement was seen in the Aussie with AUD/USD remaining above .70 as little new was gleaned from the notes. Further easing is expected late 2019, early 2020 from the bank as a slowdown in China and underpar inflation creates drag on the local economy.

EUR/USD trades around 1.1250 with USD/JPY up to 108.05

Expected Ranges

GBP/USD: 1.2440 - 1.2570 ▼

GBP/EUR: 1.1030 - 1.1160 ▼

GBP/AUD: 1.7690 - 1.7850 ▼

GBP/NZD: 1.8490 - 1.8630 ▼

GBP/CAD: 1.6210 - 1.6390 ▼