Previous Day's Market Highlights
In a widely expected decision, the Bank of England voted to hike interest rates to 0.75%, the highest level since 2009. While markets had expected a divided vote, the decision was a unanimous one. This saw sterling rally initially, erasing some of its morning losses, but the gains proved limited and short-lived, and the pound fell during the press conference when Governor Carney was cautious on the pace of future hikes.
Sterling-euro saw swings within the 1.12-1.13 band while sterling-dollar briefly regained the 1.31 level before moving lower towards 1.30. Euro-dollar ultimately fell below 1.16.
The pound’s fluctuations kept it within recent ranges against the Aussie and the kiwi dollars, but it dropped to a new low against the Canadian dollar, falling below 1.70 for the first time since January. Elsewhere, Australian Retail Sales surprised to the upside, contributing to the Aussie’s gains overnight.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
After yesterday’s rate hike excitement, it’s a quieter schedule for the pound today, although sterling traders will keep an eye on the July Services PMI (09:30 BST), forecast to drop from 55.1 to 54.7, which could put pressure on the pound.
In the afternoon, the main event is the US’s July jobs report (13:30). The Unemployment Rate is forecast to drop below 4.0% to 3.9%, while Average Hourly Earnings are forecast to have picked up month-on-month and NonFarm Payrolls to have increased a solid 190K. Overall, this could be a positive report and therefore strengthen the dollar. Wage growth is a particularly important figure, so there is a risk of dollar weakness should the figures disappoint.
Today's Economic Calendar
|9:30am||GBP||Markit Services PMI (Jul)||54.7||55.1|
|1:30pm||USD||Unemployment Rate (Jul)||3.9%||4.0%|
|1:30pm||USD||NonFarm Payrolls (Jul)||190K||213K|
|1:30pm||USD||Average Hourly Earnings MoM (Jul)||0.3%||0.2%|
|1:30pm||USD||Average Hourly Earnings YoY (Jul)||2.7%||2.7%|
|1:30pm||USD||Trade Balance (Jun)||$-46.5B||$-43.1B|
|1:30pm||CAD||International Merchandise Trade (Jun)||$-2.30B||$-2.77B|
|2:45pm||USD||Markit Services PMI (Jul)||56.2||56.2|
|3:00pm||USD||ISM Non-Manufacturing PMI (Jul)||58.6||59.1|