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GBP Forex Market Rebounds as Dollar Slips




  • Pound Bounces as BOE Promises Action
  • Strong Jobless Numbers but Dollar Weakens
  • Markets Rise into Second Half of Year

There was a hint of recovery from the forex market particularly as far as the GBP was concerned. The Pound and Euro both found themselves improving in the early trading as the Dollar strength that has been very evident in recent weeks took a step back. This calming of the USD was made all the more surprising by the fact it arrived at the end of a week where the US posted some of the best pandemic-era jobs numbers. Still, none of this has managed to steal the thunder of the equities market which has continued to move upwards into the back half of the year.

Bank of England Talks Tough on Inflation

The inflationary pressure that has been creeping into markets around the world has caught the concerned attention of most people, including those forex trading all of the major currencies. While many nations still ponder the best approach with plenty of debating and disagreeing opinion, the Bank of England Governor, Andrew Bailey, has come out strong on the issue reasserting that the bank will use all tools at their disposal to deal with the issue.

The movement off multi-week lows for Sterling then seems more driven by US Dollar weakness finally being noticed. Governor Bailey still reiterated that there should not be an overreaction to what he still feels is temporary inflation, even as one of his chief economists commented that he expected the figure to top 4% by the end of the year. Brexit, and an upward trending number of COVID-19 variant cases also remain key issues for the Pound.

USD Dips Despite Impressive Jobs Data

The US has posted some of its most impressive job numbers to date, at least since the beginning of the pandemic. Still, the Dollar saw some selling today for the first time consistently in several weeks. The number of new jobless claims has come in at 364,000 for the prior week. This marks a significant low for the pandemic era.

It is also a beat on analyst expectations as well as a decent drop of more than 50,000 on the previous week. Still, this has been balanced out somewhat by a rise in the number of continuing claims which remains well above 3 million. This may go some way to explaining the weakness.

Markets Carry On Stronger

Virtually all the major indices on Wall Street have posted impressive gains for the first half of 2021. In doing so, they have overcome fears of inflation that resided not only with forex brokers but around the whole market.

Yesterday was another broadly positive day, and the first day of the second half of 2021 also looks to be starting well. Inflationary fear has been cast aside for the moment as everything appears to be working at least for the moment. The June jobs report will be the big news to end the week here.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

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