rates table

Pound gains after strong unemployment figures

13th July 2017 Market Update

Get a snapshot of the day’s most important market events and currency movements sent straight to your inbox every morning. Sign up to our Daily Market Report.

🇬🇧 GBP – Sterling strengthened yesterday due to better than expected unemployment figures which came in at 4.5% and was forecast to come in at 4.6%. Average earnings came in as expected which also helped Sterling in the morning. Along with this the claimant count came in significantly lower.

Moody’s came out and said the UK economy has started to slow, and they expect the UK economy to weaken significantly through the remainder of this year, with the baseline scenario seeing growth declining to 1.5% this year and 1.0% in 2018, compared to 1.8% in 2016.

🇪🇺 EUR – Industrial output in the 19 countries sharing the euro currency rose by more than expected in May, aided by a spike in the production of capital goods and consumer durables. Compared to the previous month, industrial production in the euro area increased by 1.3%.

While industrial production is a trailing indicator, forward looking data also suggests a sustained recovery, with euro zone economic sentiment jumping to its highest level in almost 10 years in June.

🇺🇸 USD – Janet Yellen testified yesterday and said that the main focus will be on achieving the 2% inflation target. She is confident the US economy will continue to expand over the next few years which will allow the Central Bank to keep raising interest rates gradually.

The committee will be monitoring inflation developments closely in the months ahead. She said that Central Bank’s policy would be to get a rate that keeps supply and demand in balance in the economy. Yellen will be speaking again later today as well.

This afternoon weekly unemployment figure will be released along with PPI data.
 

Key Announcements

🇺🇸 USD
1.30pm – PPI m/m, Unemployment Claims
3.00pm – Fed Chair Yellen Testifies

 

Our View: The pound recovered yesterday following positive unemployment figures and average earnings data in line with expectations. This shows how volatile the markets remain. There also remains significant downside risk for Sterling, with Brexit remaining at the forefront of the markets.

 

Find out more about our FX Dealing Service for personal & business international payments. We’re committed to giving all clients the best rate possible, along with flexible and personalised service. Save time and money by reducing risk through a simple and efficient service.

FairFX Dealing Service

 

Share:
Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

Leave a Reply