US jobs data weakens the dollar
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Daily Currency Update
Andrew Bailey addressed the Treasury Select Committee on domestic interest rate yesterday. During the monetary policy report hearing, Bailey confirmed that there is less certainty about how quickly the Bank of England would continue to make rate cuts. Last month UK interest rates were cut from 4.25% to 4% but future cuts will be downward, gradual, and overtime. In the same report, it was stressed that the threats to the US Federal Reserve’s independence are very serious and a very dangerous road to go down. The statement comes as President Donald Trump has recently berated FED chair Jerome Powell for not cutting interest rates and attempted to fire one of its governors, Lisa Cook.There has been a small recovery in GBP/USD since the GBP dropped on bond sell-off earlier in the week. The currency pair is no back above 1.3400, but is currently finding 1.3450 difficult to break. GBP/EUR is also higher, trading back above 1.1500. EUR/USD opens just under 1.1650 after bouncing between 1.1625 and 1.1675 in the past 24 hours.
Key Movers
US economic data showed weakening labour demand yesterday. Wednesday’s job opening, a measure of labour market demand, fell more than expected to 7.181 million in July. The US dollar, which has been weakening since the bond sell-off early this week, continued to fall on the news with the FED focusing on the jobs market for its ongoing interest rate decisions. This pulls the next couple of days jibs data from the US into focus and, depending on the outcome, will either further weaken or shore up the US dollar short term.Expected Ranges
- GBP/USD: 1.3320 - 1.3510 ▲
- GBP/EUR: 1.1490 - 1.1580 ▲
- GBP/AUD: 2.0510 - 2.0690 ▲
- EUR/USD: 1.1580 - 1.1730 ▲