GBP recovered from a daily low of 1.4111 against USD but still holds below 1.42, and maintained a similar level against the EUR of 1.1605 as everyone waits with bated breath around the decision on the final stage for fully reopening on June 21st. On the one hand, coronavirus cases are increasing, but on the other, Britain recorded a day without a death since the pandemic begun; this is a huge milestone in the vaccination programme, but which narrative will hold?
Over in the US the ISM Manufacturing Purchasing Managers index beat expectations, but the FED remain unmoved. The governor Lael Brainard echoed the sentiment that the economy has a ‘long way to go’. Officials have continuously stressed that price rises are expected to be temporary.
The Fed released its “Beige book” survey, which reports on the current US economic situation through interviews with key business contacts, economists, market experts and other sources. Main takeaway was that American businesses remain optimistic as the recovery accelerates, but “significant supply challenges continues to disrupt production” and labour shortages have hit prices and output.
As it’s the first Friday of the month, the US jobs report is due tomorrow, which will be a key indicator for the Fed. Throughout the day, look out for hints on what the expected Nonfarm payrolls number could be, and later today the US will release the report on private sector employment, the Services PMI and initial weekly jobless claims.
Have a great day.
Joseph Sidders, Relationship Manager.
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