This morning at 06:00 BST the markets were given a snapshot into the UK labour economy, with some broadly positive takeaways despite the overarching negative sentiment that exists across various elements of the economy.
Unemployment levels held at 3.9%, average earnings dropped to 1.7% from 2.7%, and the change in the number of people claiming income support benefits dropped to 528,000. From a historical data perspective, the numbers are still almost off the chart, but with lockdown easing and the retail sector emerging from what has been the most challenging sales environment in history, the pound will continue to use these relative improvements to make gains. GBPUSD has pushed higher by 0.4% but remains at the mercy of the Dollar’s yoyoing risk sentiment.
The ECB has continued to build positive commentary that will reinforce what is likely to be a “prolonged period of very accommodative policy”. There is however still a lack of progress on delivering the EU recovery fund which will continue to add pressure to Euro currency pairs and is something to consider when looking at your short to medium term forward buying strategy. The ECB still maintains they will avoid adding “fallen angels” (junk status bonds) into their asset purchase program but any deviation away from that course will raise eyebrows – think back to the Greek debt days and how the Euro performed against other currencies.
Risk appetite, in general, has improved today, with the Dollar weakening and major stocks edging higher.
As always, we can only work with the information we have today and remind ourselves of the speculative structure of the currency markets. If you’d like to discuss this information in more detail and how it could impact your company’s ability to buy currency both now and in the future, please contact us today.
Have a great day.
Author: Alistair Hutson, Senior Relationship Manager
Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest exchange rates with WorldFirst prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available here.