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Brexit burns the Pound, again…

Published: Monday 06 August 2018

  • US unemployment data helps boost US Dollar
  • Brexit burns the Pound, again…
​​By Killian Greenwood

US unemployment data helps boost US Dollar

On Friday, Non-Farm Payrolls came in at +157,000 in July, below the expected 193,000 jobs. However, this is after the prior month’s figure was revised up from 213,000 to 248,000. The unemployment rate dropped back to 3.9%, as expected. Most importantly, average hourly earnings grew 0.3% month on month in line with expectations. The US Dollar has gained broadly in a rather quiet start to the week. 
Asian stocks were given a lift by China’s move to stabilize the Yuan, but the impact quickly faded. The lack of follow through buying in Yuan helps clear a near term obstacle for more of a US Dollar rally. Meanwhile, risk aversion in the markets could keep the Yen on a firm footing.

Brexit burns the Pound, again…

Sterling fell after an interview with the Sunday Times: Liam Fox, the UK’s Trade Minister, said that he saw “not much more than a 60-40%” chance of a no-deal Brexit. And he put the blame on the EU as the “intransigence of the European Commission is pushing us towards no deal.” He also warned that if the EU chooses “theological obsessions of the unelected” over “economic wellbeing of the people”, then it’s a “bureaucrats’ Brexit, not a people’s Brexit”. He went further and said it’s up to the EU to choose “ideological purity” or “real economies”. Sterling sank on the gloomy outlook.

The UK Trade Minister also criticised other UK politicians, saying that “there are people trying to undermine, to block and to thwart Brexit and having fought so long and hard to get to this point, I don’t want anything done to jeopardise our exit from the EU.” He added, “the most important thing is that we actually leave the EU in March of next year. And my job is making sure that Britain is match fit for whatever Brexit outcome we have.”

Eurozone data holds the key for the Euro today

Today’s major data releases are from the Eurozone: German Factory Orders and Eurozone Sentix Investor Confidence. A stronger result than forecast would boost the Euro, which has been under pressure from its currency partners recently. A weaker result could push the Euro down.

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