Trade in the pound was erratic on Thursday after the Bank of England (BoE) disappointed with a 50bps rate hike.
Sterling is trading without a clear direction this morning. GBP/EUR is wavering around €1.1925, while GBP/USD and GBP/CAD have slipped to $1.2202 and C$1.5698, respectively. GBP/AUD is up to A$1.7610 and GBP/NZD has climbed to N$1.9414.
The US JOLTs job openings data is in focus today. Will evidence that the American labour market remains robust help USD stage a recovery?
The pound gained ground yesterday as rising bets for a 50-bp BoE rate rise supported Sterling.
What’s been happening?
The consensus among economists had been for a 0.25% increase on Thursday. However, yesterday saw analysts upwardly revise their expectations. Markets now see a 70% chance of a 0.5% rate rise at the bank’s next meeting.
Meanwhile, the euro wavered amid some mixed data. While German retail sales and the Eurozone’s final manufacturing PMI both contracted, the bloc’s unemployment rate held at a record low for the third consecutive month.
The US dollar lost ground yesterday as a risk-on mood dented the safe-haven currency. Additionally, the US manufacturing PMI fell to a fresh two-year low.
Looking ahead to today’s session, the pound may find its movement limited as a lack of UK economic data could leave the currency without a clear direction.
What’s coming up?
Notable eurozone data is also absent today. As a result, the single currency could trade primarily on its negative correlation to the US dollar.
The latest US JOLTs job openings figures could support USD. Forecasters expect vacancies to remain well above pre-pandemic levels, suggesting that the US labour market remains robust.
A speech from Federal Reserve policymaker Charles Evans could also affect the ‘greenback’. If Evans echoes recent cautious comments from Fed Chair Jerome Powell, USD may slip.
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)