FX Daily Update – European Session 2nd July 2020
- GBP/USD maintains upwards momentum and moves higher
- Market participants shift focus to US employment data
- Global stocks edge higher on the back end of vaccine hopes and economic recovery
- USD traded lower yesterday and overnight as US data came in better than expected and positive news of an experimental coronavirus vaccine boosted investor sentiment. The Bloomberg Dollar Spot Index traded 0.40% lower and reached a fresh 1-week low. The dollar index is currently acting as a safe haven , therefore positive news is likely to invoke bearish pressure unless the sentiment changes.
- Global stocks rose as US data increased hope of a US economic recovery and a potential coronavirus vaccine eased investors’ concerns around the spike in infections. ISM Manufacturing data came in at 52.6 versus expectations of 49.8 and Markit Manufacturing PMI came in at 49.8 versus expectations of 49.6.
- GBP continued to reverse losses and traded higher for a second consecutive day. GBPUSD traded 0.65% higher reaching a level of 1.2490. Bank of England’s Haskel said that “Retail sales and spending more broadly appear to be recovering from their April lows, and we now expect Q2 as a whole will not be quite as negative as expected”, providing fresh optimism on the UK economic recovery.
- 10:00 BST- E19: Unemployment rate (Consensus: 7.7%)
- 13:30 BST- Trade balance (Consensus: -52.0bn)
- 13:30 BST- US: Nonfarm payrolls (Consensus: 3000k)
- 13:30 BST- US: Private payrolls (Consensus: 2660k)
- 13:30 BST- US: Unemployment rate ( Consensus: 12.5%)