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Sterling fights back

1st September 2017 Market Update

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?? GBP – After starting the week firmly on the back foot against the euro and the US dollar, Sterling has clawed back some ground with the potential to finish the week higher than where we started. The BoE’s Michael Saunders spoke in Cardiff yesterday calling for an interest rate rise, resulting in Sterling strength in the latter part of the day.

Manufacturing PMI data is due at 9:30 this morning, forecast to maintain a positive climb in expansion.

?? EUR – With no major data out for the Eurozone, any movement will be based on external contributing factors. Manufacturing data today is expected to remain the same at 57.4, showing positive growth.

?? USD – This afternoon we have average hourly earnings predicted to drop to 0.2%, which could add pressure to the dollar. Following this, non-farm employment change is also expected to drop from 209k to 180k and this could also weigh heavily on the dollar. To finish off a key data day for the USD, the unemployment rate is forecast to stay the same at 4.3%, which may offer some respite.

 

Key Announcements

?? GBP
09:30am – Manufacturing PMI

?? USD
13:30pm – Average Hourly Earnings m/m, non-farm employment change, unemployment rate

 

Our View: After the pound began the week at some of the lowest levels seen since 2008, Sterling has managed to claw back ground against the EUR at the end of the week. The US dollar has been volatile throughout the week and has looked vulnerable. Today’s data will provide a good indication of where the dollar will be positioned after the weekend.

 

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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.

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