Sterling treading water ahead of employment data

Sterling is a little directionless at the moment. We don’t have any tier-one UK data today but we do have a slew of speakers from the Bank of England. So sterling is likely to be a little unpredictable. However, most traders will be hanging fire in anticipation of tomorrow morning’s unemployment data. The market consensus is that the pace of contraction in the employment market is likely to have slowed in the three months to August but that the unemployment rate is likely to remain at 4.3% and average earnings are likely to have risen by 8.3% in the same, slightly below the previous month’s 8.5%. As of this morning, the GBP has picked up a little after plunging by 2 cents on Thursday and Friday. Right now that rate is at $1.2165. The GBP/EUR rate also tumbled in the latter part of last week but only by 3/4 of a cent. This pair is up to €1.1550 this morning.

NZD steady ahead of inflation data

The GBP/NZD rate trundled higher through most of last week but there was a small-scale correction on Friday. So this pair starts Monday at NZD 2.0550, having peaked at nearly NZD 2.0650 on Friday Morning. Late tonight, we will get New Zealand’s inflation data. The forecasts are mixed but the consensus seems to be that we will see a small downward tick in the annual inflation rate to 5.9% at the end of Q3, down from 6.0% in Q2. That is still substantially above the Reserve Bank of New Zealand’s target rate of 2% and an ongoing worry for New Zealand’s authorities as they try to restore growth without stoking inflation. Inflation does appear to be the priority though. Any significant variation from those consensus views will cause some overnight volatility in the GBP/NZD rate.