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Market turns its eye towards US jobs report

Daily Currency Update

GBP - British PoundBefore addressing the Non-Farm Payroll report this afternoon, yesterday was a relatively subdued day for the FX markets with the USD pushing higher against most of its peers. The pound however extended its losses from earlier in the week and it now finds itself way below the 1.30 mark against the USD. GBP/USD is now dropping towards 6 week lows. Part of sterling's problem this week has been the report that the EU are tweaking rules around MIFID II which could ostracise the City of London. Next week we have a cacophony of data once again with the UK set to report its Q4 GDP numbers. Whilst growth is expected to trickle in around 0.2%, PMI figures from the start of this month have showed that confidence and spending has increased somewhat following the general election. This data however was all collected largely prior before the coronavirus outbreak so this may not be fully reflected just yet.

Key Movers

Investors are looking for 165k jobs to be added to the US job market this afternoon, up from 145k last month and for the average wages to have increased by 0.3%. This could add further strength to the USD which has benefited this week from investors favouring US equities. Indeed the S&P 500 and Dow Jones both closed at record highs. It now appears that the market has shrugged off concerns around the coronavirus but as mentioned the effect of the outbreak may not become apparent until next month or indeed afterwards.Next Friday is Valentine's Day which will be made even more exciting due to the fact that US retail sales figures are due for release. Consumer spending makes up 2/3rds of America's GDP so retail sales is always critical to watch out for.

Expected Ranges

  • GBP/USD: 1.2920 - 1.3150 ▼
  • GBP/EUR: 1.1720 - 1.1850 ▼
  • GBP/AUD: 1.9160 - 1.9320 ▼
  • GBP/CAD: 1.7170 - 1.7220 ▼