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Sterling struggles to keep above new lows

Since yesterday’s open, we’ve been trading between narrow ranges, with sterling barely managing to keep above new lows. It looks like GBP/USD has been the most affected major, post-Brexit, trading at 30-year-lows.

Yesterday’s industrial output and housing prices data came in slightly ahead of par, seeing industrial output falling by 0.5% as opposed to the predicted 1%. This gave sterling something to work with and provided the kick it needed.

Data to come

Looking at the day ahead of us, it’s the first Friday of the month which means Non-Farm Payroll figures for June. These figures indicate employment change within the US, and the data release is likely to be the most anticipated piece of information of the day, especially in relation to where GBP/USD is. We had an early look at employment growth yesterday, with the ADP Non-Farm Employment Change, in the run up to today’s key data release. The report recorded an increase in private-sector employment of 172,000 for June, while the May report was revised down slightly. Market expectations were for a figure around 160,000 and this was the first figure significantly above consensus expectations for four months.

This data release could provide us with the strength we need or to potentially even break further support levels. The general consensus for today is an increase of 175,000 jobs from the 38,000 we saw in May, which was also the reason that the Fed held off on an interest rate increase. US Labour market improvement could quiet easily be the leading factor into how much higher/lower we open as of next Monday – all eyes will be on NFP release today. The data should provide a small boost to confidence in the labour market with today’s payrolls data still crucial for sentiment.

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