Data released early this morning shows that the UK’s jobs market is improving, with job vacancies hitting a record high at 953,000 in May to July – 168,000 more than before the pandemic. The pound is still fairly well supported against the euro and dollar following this data.
The number of people in employment also rose in July but remains below pre-pandemic levels. The Minister for Employment, Mims Davies, said that “there are positive signs of recovery in today’s jobs figures” but also added that “there is still work to do”.
The dollar is stronger this morning, benefitting from its status as a ‘safe-haven’ currency. This is due to worries over rising COVID-19 cases in the US and concerns about the escalating situation in Afghanistan.
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GBP: Sunak says “data is promising”
The pound is still fairly well supported against the euro and the dollar, following positive jobs data that was released for the UK this morning.
According to the Office of National Statistics, UK’s unemployment rate has dipped to 4.7% between April and June from 4.8% previously. The number of people in employment also rose but has remained below pre-pandemic levels.
Chancellor, Rishi Sunak, said this morning that “the data is promising. There are now more employees on payrolls than at any point since March 2020 and the number of people on furlough is the lowest since the scheme launched.”
The markets will now look to inflation rate data tomorrow, with the annual figure expected to come in at 2.3%.
GBP/USD chart over past year
EUR: Eurozone GDP today
After strengthening against the dollar yesterday, the euro is slightly weaker this morning ahead of Eurozone economic data.
Employment figures and GDP are expected later this morning. GDP is expected to show that the economy expanded by 2% on quarter in the three months to June 2021, rebounding from two consecutive periods of contraction. If the figure misses or exceeds this expectation, the euro could react accordingly.
Tomorrow, inflation rate figures will be released for the Eurozone, expected to show an increase year-on-year.
USD: Dollar benefits from global worries
The dollar is stronger this morning, benefitting from its status as a ‘safe-haven’ currency. This has occurred due to global COVID-19 concerns and the escalating political turmoil in Afghanistan.
This also comes ahead of US retail sales data later, which is expected to reflect an economic slowdown due to the re-emergence of COVID-19 cases. The month-on-month figure for July is expected to come in at -0.2%, compared to June’s reading of 0.6%.
Federal Reserve Chair, Jerome Powell, is due to speak later, although it is widely expected that he will not comment on monetary policy until the Jackson Hole Symposium next week.