Japanese Yen weaker as PM says he will stand down

The Prime Minister of Japan, Yoshihide Suga has announced he will not run for office in the upcoming elections. That plus the extended state of emergency in Japan have combined to weaken the Japanese Yen. Although GBPJPY has been in a downtrend since the end of May, we are at the top end of that range this morning at JPY 152.15. That weakness will also be partly attributable to the poor Japanese Service sector PMI, released overnight.

The other overnight news was a drop of 2.7% in Australian retail sales last month and a decline in the Aussie service sector PMI. Despite that, the GBPAUD rate dropped to AUD 1.8630 this morning. Weakness in the US Dollar is flattering other currencies like the AUD, NZD and others. The GBPNZD rate is down to NZD1.94 this morning, the lowest we have seen since the end of May. When you consider the lockdown in NZ and the ongoing fears of covid cases in the Asia and Australasia areas, it is pretty clear this is a USD driven event.

Our cups runneth over this morning with Eurozone data releases. As well as the various purchasing managers indices, we will see Eurozone retail sales data for July. Those are expected to show a significant slowdown. These ups and downs are to be expected with the lurches in and out of covid lockdowns, so perhaps the Euro won’t be hugely impacted by the data. GBPEUR starts Friday in a tight range at €1.1650 and the EURUSD rate is flattered by the USD weakness; staring the day at $1.1875.

USD awaits US employment report

GBPUSD is up too; $1.3825 is nearly a 3-week high. The USD is paused ahead of this afternoon’s US employment report. Yesterday’s weekly jobless claims data was on trend and in line with forecasts at 355,000 fresh claims. There is hope that the non-farm payroll count will reveal a gain of 750,000 fresh jobs in August and the US unemployment rate may fall to 5.2%. All of that ought to help the USD rebound to some degree, so USD buyers may prefer to avoid the risk and buy before 1.30pm (BST).

And this really ought to be the Temptations Day. Papa was a rolling stone starts with the immortal line, “It was the 3rd of September, that day I’ll always remember’. I hope this is a memorable one for you….for all the right reasons of course.

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