- Pound (GBP) is under pressure as time for a Brexit trade deal is running out
- 1 in 10 High Street shops is empty after covid hit
- US Dollar extends yesterday’s rebound despite weak ADP payroll data
- ISM non manufacturing’s employment component under the spotlight
The Pound US Dollar exchange rate is trending southwards for a second straight session. The pair settled -0.2% at US$1.3352 on Wednesday. At 06:15 UTC, GBP/USD trades -0.3% at US$1.3310.
Brexit anxieties and concerns overt he health of the UK economy are dragging on the Pound. The clock is ticking for the two sides to agree a trade deal and little progress is being made. EU Chief negotiator Michel Barnier said that the UK must make a move now and soften its position on fisheries, fair competition and solving disputes in order for a deal to be agreed by the strict deadline at the end of October. Michel Barnier said that the British government has not shown sufficient flexibility in these areas for a deal to be achieved.
Adding pressure to the Pound are growing concerns over the health of the UK High Street. A recent survey showed that 10% of shop now stand empty, reflecting the recent closures caused by the coronavirus crisis. Big names such as Debenhams, Oasis and Laura Asley have already gone into administration. Whilst other major retailer such as Boots and John Lewis are also closing stores.
Attention will now turn to UK service sector PMI data and a speech by Bank of England Governor Andrew Bailey later today.
The US Dollar is extending gains across the board despite disappointing ADP payroll data in the previous session. 428,000 jobs were created in the private sector in August. This was well short of the 950,000 hires forecast and doesn’t bode well for Friday’s non-farm payroll report.
Attention will now turn to the ISN non-manufacturing report. The gauge is expected o decline to 57, down from 58.1. Investors will be looking closely at the employment component of the report, which is expected to decline, stacking the odds up that Friday’s jobs report will be disappointing.
