Pound (GBP) Steady on Mixed Employment Figures
The Pound consolidated its gains during yesterday’s session as the UK’s latest jobs report made for mixed reading.
UK unemployment was revealed to have climbed to 5.1% in December, with a huge loss of jobs in the hospitality sector propelling the jobless rate to its highest levels since 2016. But the accompanying earnings figures, which showed wage growth rocketed up to 4.7% over the same period, helped to offset the rise in unemployment.
Meanwhile, GBP exchange rates pushed higher again this morning as the Pound US Dollar briefly hit $1.42. At the same time, the Pound is firm against the Euro, with GBP/EUR at €1.16.
Looking ahead, the focus for GBP investors through the remainder of this week is likely to be the UK’s coronavirus statistics, as they will determine whether the government can move on to the first stage of its lockdown easing plans.
Euro (EUR) Dented by Vaccine Concerns
The Euro struggled to attract investors on Tuesday as the appeal of the single currency continued to be undermined by the EU’s slow vaccine rollout.
This is stoking concerns that parts of the Eurozone could be stuck in protracted lockdowns this year, hampering the bloc’s chances for a sustained economic recovery in 2021.
Meanwhile, the Euro may be able to find some support today as German’s GDP reading saw growth in the last quarter of 2020 revised up from 0.1% to 0.3%.
US Dollar (USD) Dips on Powell Comments
The US Dollar edged lower during yesterday’s European trading session as Federal Reserve Chair Jerome Powell testified before Congress.
Powell suggested that while the outlook has improved, the US economy remains a long way from achieving its inflation and employment goals, while also signalling that a strong jobs market alone will not be enough to push the Fed to tighten its monetary policy.
Powell’s testimony will continue today, but the focus for USD investors is likely to turn to President Biden’s stimulus package, which it’s hoped will be pushed through by lawmakers by the end of the week.
Canadian Dollar (CAD) Flat as Oil Prices Stall
The Canadian Dollar was mostly muted on Tuesday, with the oil-sensitive ‘Loonie’ unable to find any strong directional bias as WTI crude prices stalled at $61 a barrel.
Australian Dollar (AUD) Finds Fleeting Gains on Upbeat Wage Price Index
The Australian Dollar initially rallied during Wednesday’s Asian trading session, being buoyed by a stronger-than-expected rise in Australia’s Wage Price Index in the last quarter of 2020. However, the ‘Aussie’ then shed most of these gains amidst a prevailing sense of caution.
New Zealand Dollar (NZD) Firms on RBNZ Upbeat Economic Outlook
The New Zealand Dollar struck higher overnight on Tuesday, with the ‘Kiwi’ being bolstered by the Reserve Bank of New Zealand’s (RBNZ) upbeat economic assessment following the bank’s first policy meeting of 2021.
Data Releases
07:00 EUR German GDP (Q4)
15:00 USD Fed Powell Testimony