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US Jobs pauses the decline

US Jobs pauses the decline

GBP

The forthcoming round of Brexit talks in Brussels next week is slated to have a dinner on the Tuesday and press conference on the Friday, limiting negotiation time with only two full days of talks meaning the odds of a potential breakthrough are lower. UK chief negotiator David Frost maintained that a deal was achievable in September and Irish foreign minister Martin was also sounding optimistic on the chances of a deal. 

Sterling resisted further selling against the Euro but Dollar losses dominated, and the Pound pushed above the 1.3100 level. Late on, a dip in global risk appetite hampered Sterling’s progress and a dollar recovery pushed Sterling lower whilst the Euro slipped slightly to 1.1075 from daily highs of 1.1050. 

The UK added two more countries to the 2 week quarantine list: France and the Netherlands. The increase in uncertainty means Sterling is marginally lower today: the Euro edged towards 1.1050 and the Dollar trades near 1.3070 on the dollar.

 

USD

US jobless claims declined to 963,000 in the latest week from 1.12mn the previous week and below consensus expectations of 1.11mn. Continuing claims declined to 15.49mn in the latest week from 16.09mn previously and also below market forecasts. There were still important reservations over the labour-market trends, especially given that claims could be lowered by eligibility issues and an increase in discouraged workers.

Import prices increased 0.7% for July with the year-on-year decline moderating to 3.3% from 3.8% as speculation over higher inflation increased slightly.

The dollar secured only brief respite as the downtrend resumed with fresh gains for the Euro and commodity currencies reinforcing downward pressure. The latest data recorded an increase in borrowing through the Federal Reserve main-street lending programme, reinforcing reservations over the underlying outlook.

 

EUR

The Euro peaked just above 1.1860 yesterday, although the Dollar did secure some relief later in the European session with the Euro retreating back down to the 1.1800 area. 

There were also further concerns over the Euro-zone’s coronavirus developments as the number of new German and French cases continued to increase. Markets will remain wary over pre-weekend position adjustment and with potential choppy trading expected.

As of writing, the Euro is currently trading around the 1.1810 mark against its US counterpart. 

 

Data to watch

12:30 – USD – Retail Sales 

12:30 – USD – Core Retail Sales 

14:00 – USD – Prelim UoM Consumer Sentiment

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