The GBPUSD rate fell on Wednesday due to dollar strength despite private sector employment in US rising less than expected in July. The data published by the Automatic Data Processing (ADP) Research Institute reported that employment in the US private sector rose by 330,000 in July. This reading significantly missed the market expectation of 695,000 and made it difficult for the greenback to gather strength. The dollars losses were limited however as the latest Institute of Supply Manager’s Services Purchasing Managers Index report was positive coming in at 64.1, and was further supported by positive comments from Fed Vice Chairman Richard Clarida. Clarida said the Federal reserve is likely to hit its economic targets by the end of next year and start raising interest rates again in 2023. While he said the jobs market still has to recover, Clarida noted that inflation is tracking to meet and exceed the Fed’s 2% goal.
All eyes today will be on the Bank of England meeting today. Many analysts are expecting the recent hawkish tone to continue from the rate setters of Threadneedle street.
Have a great day.
William Jones, Senior Relationship Manager.
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