Good morning,

After a week driven mainly by rumour and intrigue surrounding UK/EU trade talk progress, especially regarding a possible imminent breakthrough on fisheries, this week is shaping up to be one focused on economic data.

The UK has three important releases that will impact foreign exchange rates to varying degrees this week, starting off with critical manufacturing and GDP figures tomorrow at 7am, which will likely set the tone for the rest of the week’s trading. Whilst it is well known that global economies have taken an obvious coronavirus hit; how quickly economies now rebound out of lockdown will contribute to their respective currencies health in the mid-term.

On Wednesday 15th July, again at 7am, inflation figures will be released – critical data to the Bank of England, especially regarding the continuing conversation surrounding reducing interest rates. Sterling has been prone to wobbles when the subject is brought up, with Governor Andrew Bailey steadfastly refusing to debate going negative for the first time in the bank’s history; the inflation numbers will need to support his endeavours here, or the fear of a cut will creep back into the minds of pound traders.

Lastly, unemployment numbers will be released, again on the stroke of seven o’clock on Thursday. Markets are fretting on how employers have reacted to confirmation from the Government in the summer statement, as employers begin to start paying part of their staff costs alongside furlough payments in August. Whilst numbers for next month will be more heavily scrutinised as far as impacts go, it remains to be seen whether some employers have sought to get themselves ahead of the game regarding giving notice to staff before the furlough pay cliff hits.


Have a great day.

Author: Joshua Haden-Jones, Senior Relationship Manager


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