Prior to the Covid-19 pandemic, the majority of UK companies employed an on-site workforce to conduct the day-to-day running of their business, with only 27% of employees having worked from home at some point in 2019, on average.
- Rising unemployment limits US dollar appeal
- Signs of Chinese economic resilience boosts Australian dollar
Weak construction growth may add to pound losses
A better-than-expected UK manufacturing PMI failed to offer the pound any sustained support ahead of the weekend.
While the index picked up from 48.3 to 49.6, rising to its best level in six months, this still left the sector in a state of contraction at the end of the third quarter.
Investors could find fresh cause for anxiety over the outlook of the UK economy this morning with the release of October’s construction PMI.
Although construction only accounts for a limited proportion of UK economic activity, any fresh signs of a slowdown could still weigh on GBP exchange rates.
Factory orders decline forecast to drag on US dollar
USD exchange rates failed to benefit as October’s US non-farm payrolls report showed a stronger increase in jobs than forecast.
Even though the economy created 128,000 new jobs this was not enough to prevent the unemployment rate picking up from 3.5% to 3.6% on the month.
Fresh anxiety over the underlying health of the US economy could be in store this afternoon as forecasts point towards another monthly decline in factory orders.
Australian dollar under pressure ahead of RBA announcement
Evidence of greater resilience within the Chinese manufacturing sector offered a boost to the Australian dollar as market risk appetite generally improved.
However, AUD exchange rates could come under renewed pressure tonight as markets brace for the Reserve Bank of Australia’s (RBA) latest policy announcement.
As RBA policymakers have been cautious in recent comments investors are wary of the potential for a greater shift towards dovishness.
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