GBP/USD
A new day and the Pound’s bounce back continues, now making for its 4th consecutive day of upwards momentum. Currently, the rate is on track to climb back up to the levels it was perched at before it began to tumble down this month following UK economic concerns arising. Permitting these gains so far today is a strong economic report from the UK this morning that has evidently gone down well with investors. Data on both the Unemployment Change and Unemployment Rate for the UK came in above consensus by quite a large margin, giving the Pound the boost we have seen so far. These upbeat employment figures go hand-in-hand with BOE Governor Andrew Bailey’s recent hawkishness, suggesting faster rate hikes by the Bank than expected. As for the Dollar, it has found itself struggling recently following China’s announcement that Shanghai will gradually reopen, making for a switch in risk appetite in the markets. With the Dollar previously having immense amounts of strength in the markets, it is unsure how long these Pound side gains will be facilitated for. Later on today a report from the US on Retail sales along with a Fed member speech is expected. If favourable, this may cut the upwards growth of the rate short as the Dollar regains strength.
GBP/EUR
The Pound has also found itself shoot up against the Euro, with the rate now on track to reach the levels we saw at the start of this month. This sharp upwards climb now makes for its 5th consecutive day of positive movement seen in the market. As mentioned above, UK employment figures came in largely above consensus earlier today, likely giving the Pound fuel to continue its uphill climb. Up until recently, data from the UK has fallen short and brought about fears of a recession, weighing on the Pound, but this data has shown a glimmer of hope for the currency. As for the Euro, it has found itself in hot water once again over the Russia-Ukraine conflict. As the war grinds on it is becoming more and more apparent that there is no end in sight, with fears of a more global conflict as Sweden and Finland look to join NATO which is likely to agitate Russia. As for economic data, the bulk of the UK’s for today is behind us, with markets now anticipating an important data release relating to European GDP growth. If the data released comes in above consensus it is likely that the gains seen so far in the rate will be capped.
Morning Update published by Frank Brightman (17/05/2022)