Daily Currency Update

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GBP rebounds amid UK reopening

GBP - British Pound

The pound is experiencing a minor bounce back against the US dollar and euro, as it breaks a two-day decline following the Bank of England’s comments, where the central bank did not hint as to when it could start tightening monetary policy.

Matt Hancock quit as health secretary over the weekend after breaking social distancing guidance and has been replaced by Sajid Javid, the ex-home secretary under Theresa May. The pound reacted positively following his appointment and given some of his previous comments, Sajid Javid could be more comfortable easing Covid restrictions than his predecessor.

Key Movers

It’s a relatively busy US data calendar for the week ahead which includes consumer confidence results, ADP Non-Farm employment change and ISM manufacturing PMIs, but all focus will be on Friday for June’s Non-Farm Payrolls figure with the nation expected to add almost 700K jobs.

The Federal Reserve has put much greater weight on the labour market, with policymakers wanting to see more progress. The Non-Farm Payroll data could move the markets. The payroll data is out at 1:30 pm on Friday. A 700k increase would push the unemployment rate down from 5.8% to 5.7%; some way off the pre-pandemic low of 3.5%.

Expected Ranges

GBP/USD: 1.3895 - 1.3940 ▲

GBP/EUR: 1.1645 - 1.1685 ▲

EUR/USD: 1.1925 - 1.1965 ▲