- Pound (GBP) advances as UK consumer confidence beats expectations
- Brexit trade talks conclude, stalemate expected
- US Dollar (USD) looks to non-farm payroll, -8 million job losses anticipated
- At 06:20 UTC, GBP/USD is trading +0.15% at US$1.2616
The Pound is advancing versus the US Dollar for a seventh straight session on Friday. The Pound US Dollar exchange rate is on track to have gained over 2% versus the greenback this week, adding to gains across the previous two weeks.
At 07:15 UTC, GBP/USD is trading +0.15% at US$1.1216 as investors digest better than forecast UK consumer confidence data, Brexit and look ahead to the release of US non-farm payrolls.
UK consumer confidence dropped to the lowest level since the financial crisis, over a decade ago. According to GFK, a polling firm, household morale plunged to -36 in the second half of May, down from -34 amid concerns over rising unemployment and falling house prices. The figure was better than the -40 analysts had anticipated.
Brexit concerns have been lingering for Pound traders as Brexit trade talks continued across the week. Today, EU chief negotiator Michel Barnier will give an update on progress. However, progress is expected to have been slow with considerable distance remaining between the two sides on key issues. Given the stalemate in talks, pressure is mounting on political leaders to find a way forwards when they meet later this month.
The US Dollar is edging lower in early trade on Friday, as risk on sentiment continues to sap demand for the traditional safe haven. Despite some truly terrible data, investors are remaining upbeat as economies continue to reopen.
US non-farm payrolls, the most closely watched US macro release each month is expected to show that -8 million American jobs were lost in May. This is an astonishing figure, however, it is still considerably better than the 25 million jobs lost the previous month.
This figure is expected to push unemployment up to 19.5%, from 14.7% in April. If the reading comes in worse than expected, there is a good chance that investors will brush it off, as they have done many times. If the data comes in better than forecast, this could signal that perhaps the downturn wasn’t as bad as expected, potentially triggering another sell off in the safe haven greenback.
