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A minor setback for GBP?

A minor setback for GBP?

Yesterday’s unexpected rise of the unemployment rate in the UK to 7.2 per cent put GBP on the back foot. However, given the strong pace of British economic recovery this may be seen as just being a temporary blip, and the long-expected 7.0% figure isn’t thought to be too far away.

There isn’t anything in the UK economic calendar today so any movement for GBP will be dependent on figures coming out of other countries. Tomorrow, we will see UK retail sales for January which due to the weather conditions are not expected to be overly positive.

This morning’s data release from France showed both French manufacturing and services PMI come out at worse than expected levels.

In the US, the focus today is on the weekly labour market report, the Markit PMI and CPI figures. Yesterday’s FOMC minutes from the meeting at the end of January showed that the possibility of interest-rate increases may be needed soon to prevent the economy from “overheating”. The fact that the subject came up at all in January shows how the central bank’s policy debate is slowly and subtly evolving and might offer the first glimmers on a distant horizon of a Fed move.

In Asia, the Japanese Yen strengthened versus all its 16 major counterparts as investors sought the perceived safety of the Japanese currency after Asian stocks fell following private data that signalled weaker Chinese manufacturing.

 

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