020 7898 0500On Friday, employment data helped provide a huge, much-needed boost for the dollar. It recovered almost all its losses against the euro which it had made throughout last week. The unemployment rate dropped to 4.3% and average hourly earnings came in above expectations, with a 2.5% increase since this time last year. With July’s non-farm payrolls in at 209,000 against an expected 183,000, we could be set for the biggest one-day percentage gain since December 2016 .
Looking to the week ahead, the main data piece is July’s CPI data. Inflation has slowed down in recent months to 1.6% in June, but forecasts suggest we might see a slight increase to 1.7% for the month of July. Should inflation come in better than expected, we could see the dollar strengthen and the GBP/USD pairing could fall below the psychological 1.30 mark.
