- Pound Losses Some Ground on Jobs Growth
- USD Also Pressured by Inflation
- Wall Street Markets Improve Slightly
The release of jobs data in the UK has prompted a slight pullback in the GBP/USD forex market. This pair is now trading below 1.385 as analysts take in the underwhelming employment data even though they represent an improvement. At the same time, the US Dollar finds itself under increasing pressure from inflation figures, but currencies like Sterling are in no place to take advantage of the situation. The Fed is sticking closely by their stance that any inflation is transitory, but it is persisting. On Wall Street, minor gains have allowed the S&P and Dow Jones to both snap multi-day losing runs they had been on.
UK Job Improvements Fail to Impress
Employment numbers in the UK have picked up slightly, though this has not impressed those trading the GBP/USD which has dipped as a result. Although the unemployment rate for August fell from 4.7% to 4.6%, only a total of just over 58,000 jobs were added. This is a minimal number with many analysts had expected more.
This data may typically support more of a response from the pair, but the movement of the Dollar in this instance is also key. Eyes will remain fixed on the reported US CPI numbers that will decide the next move for the GBP/USD and others.
Inflation Pressure Remains for Dollar
There are critical numbers to come later today as US CPI data for August is released. The forecast is an increase of 5.3% on the headline number, with a 4.2% core increase. These figures would represent a small decline, but still, very much keep the pressure on the Fed in regard to tapering. Continued high numbers will undoubtedly see the US Dollar advance in strength continue.
The key question remains the same. When is it time for Jerome Powell and the Fed to intervene with tapering and measures to hold back this high-flying number? The answer being heard increasingly from Fed Chiefs around the country, is right away. This still is not the stance of Powell though. At least in public, he continues to remain adamant as to the transitory nature of inflation.
Stock Market Snaps Losing Run
It has been a challenging start to the week on Wall Street. A multiple-day losing run extending from the end of last week was yesterday just broken by the S&P500 and Dow Jones, both of which advanced a little. Futures trading in the early hours is also inching higher approaching the opening.
It is likely though, at least early in the day, much like forex brokers, that the stock market will be quiet. Traders will want to view and take time to digest the impact of CPI figures before making any strong moves. The declining number of COVID-19 cases, as well as the economic releases of the day, are likely to impact.