GBP: Brexit deadline extended by 3 months
EUR: Who cares?
USD: Gaining strength
Today is all about comments from Bank of England Governor Bailey in speeches both this morning and evening. This morning’s speech has only recently been announced which typically hints at an urgent need to clarify or correct a market move that the Bank of England has an issue with.
Given sterling’s recent performance we are unsure as to what that could be but are all ears when the Governor takes the stage.
Sterling remains resilient at the moment despite increases in Covid-19 case numbers linked to the delta variant and the reopening of the economy. For now, it looks like the vaccination program has broken the link between infection and hospitalisation/death and we expect any weakness in the sterling price to wash out sooner rather than later.
It is not European data that is hammering the euro at the moment but instead the strength of the US data and its effect on the USD. Today may be a quieter day ahead of the payrolls announcement tomorrow but with an ECB eager for a soft euro, nobody on the continent is putting up much of a fight in favour of the single currency.
Yesterday’s jobs report from the US was not enough to change too many minds on the state of the US jobs market but a beat on the ADP measure of employment helped the USD strengthen ahead of the payrolls report on Friday.
If initial jobless claims also show a level of strength with the number of people claiming unemployment insurance falling then we can see further USD strength over the course of the day.
Those of you on our 2nd half outlook webinar yesterday will know that this is what we think will be the key determinant for markets moving forward.
The mood in equities is a little more cautious this morning than most given the increase in Covid-19 cases globally. We may see a rise for the haven currencies of the yen and Swiss franc should the worry turn into a new panic.
Today’s interbank rates at 07:58 against sterling. Movement vs yesterday.
|US dollar||$1.382 –|
|Australian dollar||$1.846 ↑|
|South African rand||R19.72 ↓|
|Japanese yen||¥153.7 ↑|
Have a great day.