Home Daily Commentaries UK reaches 600,000 unemployed

UK reaches 600,000 unemployed

Daily Currency Update

GBP - British PoundThe UK found itself on the back foot on Tuesday morning after worse-than-expected employment data added further pressure to the British economy, two days before Thursday’s scheduled Bank of England meet. The data release suggests 600,000 are currently unemployed in the UK, however this has dramatically improved since last month. It’s certainly not ideal in the current climate and will help justify a rate cut if the MPC swing that way on Thursday. The GBPUSD exchange rate sits just above the $1.26 handle at present and tomorrow’s inflation data release is unlikely to shift this too dramatically. The pound has reacted awfully to the struggling economy and therefore a cut on Thursday would likely see the pound below the $1.25 handle once again.

Key Movers

The US slipped against its major peers on Monday as the Fed prepare to kickstart their corporate bond buying scheme. The scheme is an attempted stimulus package, which will alleviate the burden many SMEs are facing as a result of the global pandemic. Alongside this, there was a Bloomberg report suggesting Trump is close to announcing a further $1tn stimulus package. This safety net has sent risker currencies rallying as the New Zealand and Australian Dollar soar. The stimulus package is all well and good however Florida, Texas and Arizona all marked record high Covid-19 cases, suggesting parts of the US are not yet at peak, let alone second wave. The rest of the week brings with it a number of US data releases, which will help the Fed gauge the appropriate response level for their next central bank meet.

Expected Ranges

  • GBP/USD: 1.2550 - 1.2745 ▲
  • GBP/EUR: 1.1060 - 1.1240 ▲
  • GBP/AUD: 1.8180 - 1.8350 ▲
  • GBP/CAD: 1.7100 - 1.7250 ▲