Pound steady ahead of high-impact UK data

The pound held in a narrow range on Monday as GBP investors braced for a slew of high-impact UK data.

Sterling is off to a positive start so far this morning, with GBP/EUR climbing to €1.1710 and GBP/USD strengthening to $1.2806. GBP/CAD has accelerated to CA$1.7592, while GBP/AUD and GBP/NZD hold steady at AU$1.9412 and NZ$2.1212, respectively.

Looking ahead, the pound may build on its early gains, after the UK’s latest jobs report beat forecasts.

What’s been happening?

The pound traded sideways during yesterday’s session, with GBP investors reluctant to reposition ahead of this week’s UK data.

Included in this week’s burst of data is the UK’s latest inflation and GDP figures, which could both be key in determining how aggressively the Bank of England (BoE) cuts interest rates through the remainder of 2024.

The US dollar also got off to a stable start this week, particularly in contrast to last Monday’s market turmoil.

Offering support to the ‘greenback’ this morning is a prevailing risk-off mood, amid rising tensions in the Middle East.

However, the upside in the dollar remains limited in scope amid growing bets for a sizable interest rate cut from the Federal Reserve next month.

Meanwhile, the euro was rangebound on Monday in the absence of any notable Eurozone data.

What’s coming up?

Today’s session kicked off with the publication of the UK’s latest jobs report

Data published by the Office for National Statistics (ONS) showed unemployment in the UK unexpectedly fell in the three months to June, falling from 4.4% to 4.2% versus forecasts it would climb to 4.5%.

Wage growth (excluding bonuses) also outpaced expectations in June which, together with the surprise fall in unemployment, is lifting the pound as it weakens BoE rate cut bets.

For EUR investors the focus this morning will be on the latest ZEW economic sentiment index from Germany.

Markets predict a deterioration in morale this month as the general malaise surrounding the Eurozone’s largest economy has only grown after data showed that German GDP contracted in the second quarter.

This afternoon will then see the publication of the latest US producer price index. Producer prices are forecast to have slowed last month. This may drag on the US dollar if it weakens expectations ahead of tomorrow’s US inflation print.