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The UK reported employment and earnings data this morning. Editorial credit: I Wei Huang, via Shutterstock.
Joblessness in the United Kingdom in June came in unchanged from the month prior at 4.7%, we learned this morning. After a quiet Monday, sterling was on the rise against both the euro and the US dollar immediately following that news.
Perhaps this rise had more to do with the average earnings report. Excluding bonuses, British workers secured an average 5% annualised pay rise in the three months to June, in line with expectations. However, if you include bonuses, the average increase was only 4.6% – well below the predicted 5%.
A steady and tentatively optimistic start to the week saw the price of gold fall in light trading. The US dollar made the largest inroads among major currencies yesterday and was boosted by both news that the trade deadline with China would be extended and the hope that talks between Donald Trump and Vladimir Putin would produce genuine progress.
In what was hardly a positive indicator for the jobs market, data from KPMG and the Recruitment & Employment Confederation (REC) showed recruitment activity was stuck near a two-year low last month. A majority of recruiters are continuing to see hiring contract amid an uncertain economic outlook and higher costs for businesses.
Overnight, the Reserve Bank of Australia decided to cut interest rates from 3.85% to 3.6%. That decision came in line with market expectations. The Australian dollar weakened by a slim margin against the pound and the US dollar in response.
The American political scene was rocked yesterday by reports that President Trump is preparing to send the National Guard into Washington DC to tackle crime. The decision is certainly an extreme one and mirrors his move earlier this summer to send the National Guard to Los Angeles to quell protests.
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GBP: A mixed opening
Sterling’s performance was mixed yesterday, strengthening by around 0.3% against the euro and weakening by about half a cent as the US dollar made a recovery. Ahead of Thursday’s crucial GDP report, the pound’s path is very much uncertain.
GBP/USD: the past year
EUR: Risks and opportunities
A quiet summer period presents both risks and opportunities to the euro, which slid against the pound and the US dollar to start the week. The slow trickle of data (including this morning’s German consumer sentiment report) will in all likelihood be eclipsed by events elsewhere, leaving the euro reliant on external events to provide a direction.
GBP/EUR: the past year
USD: Will improved mood last?
After a string of gloomy weeks, the US dollar began Monday on a positive note. However, slight improvements and the trade and geopolitical fronts won’t make up for economic weakness. Plus, there’s still no guarantee that the American economy will suddenly turn a corner or that Trump can broker a lasting peace with Putin.
EUR/USD: the past year
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