Weak US jobs news saps USD enthusiasm

The US ADP report on non-agricultural and non-government employment was a disappointment yesterday. Just 374,000 new jobs were created in the sector and that was way below forecast. So, the banter about possible tighter monetary policy in the US stopped immediately and there was even a worrying tone from the President of the Atlanta Fed about the rising number of evictions across the US and the impact that will have on US economic recovery.

US weekly and monthly jobless data awaited

That was enough to stop the USD in its tracks. GBPUSD Starts today at $1.3780, having topped out just below $1.38 overnight. US traders will now focus on today’s weekly jobless claims numbers and tomorrow’s August employment report to see if that data concurs with ADP. If that data is similarly lacklustre, we should see the GBPUSD rate make further gains.

EURUSD rate followed a similar pattern, peaking at $1.1855 yesterday before settling back to $1.1840 this morning. As with cable, if the US data disappoints, the Euro has room to gain. However, we lack EU data today, so it will be entirely US data-driven.

Australian home loans drop but better than forecast

Overnight we saw further negative data from Australia but it wasn’t as bad as had been feared. A 0.4% drop in home loans was much better than the 2% decline that most had feared, so the overall effect was positive. GBPAUD starts today at AUD 1.8660 and it has been a quarter of a cent lower overnight. That is part of a downtrend that started with a turnaround on 20th August when this pair topped out at AUD 1.9150. You can spot the smug smiles of those who bought around that time from a mile away.

Other than the US data, Thursday lacks any other solid impetus but that won’t stop traders from being busy. August is a notoriously quiet month in financial markets and we are just seeing the recovery from that now. The major talking points are still covid, the recovery from covid and the monetary policy that accompanies that recovery. Anything else is like a garnish or side order to the main meal.

And on this day in 1666, the great fire of London began in Pudding Lane. 80% of London was razed to the ground. There are theories that this was a conspiracy to rid London of the bubonic plague that had ravaged the city throughout the previous year. All I know is that Samuel Pepys saved his wine and cheese by burying it and Pudding Lane is still there in EC3R.

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