3rd August 2018 Market Update
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?? GBP – The pound fell on Thursday despite the Bank of England raising interest rates by 0.25%. This was after Governor Mark Carney said monetary policy needed to be slow and steady and expressed concern about the risks of a no-deal Brexit. The increase was largely expected and already priced in, so the Governor’s comments were what investors were really waiting for and it did little to bolster confidence.
Today’s opening session sees the pound continue to struggle. It is now all about Brexit developments and this morning’s Services PMI data is unlikely to have any impact.
?? EUR – As ever, there is little to report with the single currency, with yesterday’s gains stimulated by external factors.
There is no data due out today.
?? USD – The dollar firmed against a basket of currencies on Thursday and into this morning, with markets remaining concerned over escalating trade tensions between the United States and China. The dollar index, which measures the currency against six others, hit a two-week high at 95.211. With the pound looking frail, the dollar has broken through a key trading level.
This afternoon sees the Non-Farm Payroll and Unemployment Rate figures. A strong showing here could see further dollar strength.
09:30am: UK Services PMI
13:30pm: US Non-Farm Payrolls
13:30pm: US Unemployment Rate
Summary: Despite the BoE raising interest rates, Sterling actually lost value on policy statement.
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