04/09/2020

Economic uncertainty forces sterling lower


GBP

Sterling extended its losses against both US Dollar and Euro as Brexit uncertainty and a bleak economic outlook weighed on the pound.

The lack of progress in Brexit negotiations is hurting the pound, with Brexit Chief negotiator Michel Barnier saying he was “worried and disappointed” that Britain had not changed its position on key sticking points. However a spokesman for Boris Johnson voiced that comments made by Barnier were misleading.

Over the past few days sterling has mainly benefitted from weakness in both the euro and dollar, edging higher against both currency pairs but investors are now worried about fears over Brexit and the economic outlook.

USD

The dollar benefitted from better than expected jobs data which showed the number of Americans filing new claims for unemployment benefits fell more than expected.

The Labor Department reported that initial claims for state unemployment benefits totalled a seasonally adjusted 881,000 for the week ended August 29, compared with 1.011 million in the previous week. Figures still remain at record highs which shows how much of a damaging impact the coronavirus pandemic has had on the US economy.

Key announcements

13:30 – USD – Average hourly earnings – Forecast at 0% from a previous 0.2%
13:30 – USD – Non-farm employment changes
13:30 – Unemployment rate – Forecast at 9.8% from previous 10.2%


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