The Australian dollar trended lower through the majority of last week, with the risk-sensitive currency struggling to attract support as a gloomy market mood prevailed through most of the session.
After bottoming out at a six-month low against the euro last week, the pound sought to recoup some ground on Monday despite the initial passing of the UK’s internal market bill.
Sterling is struggling to maintain the upward momentum this morning however, with GBP/EUR muted at €1.0808 and GBP/USD subdued at $1.2846. GBP/CAD is rangebound at C$1.6899, while GBP/AUD and GBP/NZD have slipped to AU$1.7556 and NZ$1.9124 respectively.
While the focus is likely to remain on Brexit today the publication of the UK’s jobs report could also influence the Pound.
What’s been happening?
The pound mounted a tentative recovery at the start of this week’s session, with GBP investors cheered by MPs growing criticism of Boris Johnson’s controversial internal market bill.
While the bill still made it through the first hurdle with MPs backing it by 340 votes to 263, GBP investors seem hopeful that the bill will still be amended next week.
The euro also pushed higher on Monday, supported by a slightly stronger-than-expected Eurozone industrial production report for July.
However, the single currency’s gains were capped by concerns over Europe’s coronavirus resurgence. The World Health Organization (WHO) warned that ‘it’s going to get tougher’ in the months to come.
Meanwhile, the US dollar was placed on the defensive yesterday, with demand for the ‘greenback’ diminished by both an improvement in market sentiment as well as doubts that the Democrats and Republicans will be able to reach any kind of deal on the next round of coronavirus stimulus.
What’s coming up?
Today’s data calendar kicked off with the publication of the UK’s latest jobs report, which has given GBP investors their latest insight into how the jobs market is faring.
July’s figures highlight how the coronavirus crisis has hit UK workers, with a rise in unemployment and a contraction in wage growth likely to contribute to weaker UK economic growth going forward.
However, with Brexit dominating the agenda for GBP investors the impact of the job figures on the pound could prove limited.
For EUR investors the focus today will be on this month’s ZEW economic surveys from Germany. The euro could give up some ground today if Europe’s coronavirus resurgence led to a weakening of economic sentiment this month.
Closing out today’s session will be the publication of the latest US industrial production figures. Will another robust reading in August offer some support to the US dollar?
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)