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Markets await US Jobs Report

GBP - British Pound

Sterling has continued to fall away throughout the week versus the dollar as some sense of calm is restored to the value of the world's reserve currency. After peaking close to 1.35 on Tuesday it is now trading under 1.33 as we get nearer to the next round of Brexit talks scheduled to start on Tuesday next week. Talks will run through to Friday. Markets will be hoping that some narrowing of the gap between the two sides can be forged in an effort to get a deal done by the end of the year. It seems implausible a deal will be agreed next week so this will likely run on a while longer. And with the end of year deadline drawing ever nearer its likely sterling will wobble on the back of negative headlines.

Its a relatively quiet end of the week for the pound with only Monetary Policy Member Michael Saunder's online speech at 10:30am the only real talking point. GBP/EUR trades around 1.1220.

Key Movers

All eyes will turn to America at lunchtime today as the monthly jobs report is published at 1:30pm. The headline Non-Farm Payrolls is expected to show 1.375m jobs created in August. Wages are expected to flatline and the unemployment is predicted to drop below 10% which will no doubt be seized upon by President Donald Trump (likely via Twitter) should it come to fruition.

Yesterday saw the latest set of US unemployment claims data with 881k new people filing for unemployment insurance last week. This was slightly better than predicted however it should be noted that this is only the second sub 1m reading since Covid-19 took grip and we have had several multi-million results over the past few months with Coronavirus still circulating in huge numbers throughout America.

After a long sustained rally in US equity markets it appears we are seeing a correction as some of the huge tech stocks that have benefited from Covid-19 saw big drops yesterday. Amazon, Apple, Microsoft, Facebook and others saw hundreds of billions wiped from the value as investors start to reassess the global economy after the summer holidays.

From the Eurozone its a quiet end to the week with the next highlight Thursday's European Central Bank interest rate decision. No change in policy is expected, however we may see more quotes on the value of the euro as policymakers try and jawbone its value lower without actually lowering rates or printing more money. EUR/USD holds around 1.1840 with USD/JPY at 106.2

Expected Ranges

GBP/USD: 1.32 - 1.34 ▼

GBP/EUR: 1.1175 - 1.1280 ▲

GBP/AUD: 1.8160 - 1.8320 ▲

GBP/NZD: 1.9680 - 1.9850 ▲

GBP/CAD: 1.7360 - 1.75 ▲