{"id":3840,"date":"2017-07-07T00:00:00","date_gmt":"2017-07-07T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100164-gbp-usd-soft-jobs\/"},"modified":"2017-07-07T00:00:00","modified_gmt":"2017-07-07T04:00:00","slug":"100164-gbp-usd-soft-jobs","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100164-gbp-usd-soft-jobs\/","title":{"rendered":"Dollar Softer Versus the Pound Ahead of Monthly U.S. Jobs Report"},"content":{"rendered":"<p>Today\u2019s movements in GBP\/USD will be all about the non-farm payroll figures from the U.S. However, other headlines will also be expected from the G20 summit in Hamburg, Germany, with political risk raising its head once more this week.<\/p>\n<p>The dollar is on the back foot against the pound going into the monthly jobs report. The pound-dollar exchange rate finished the previous session close to the day\u2019s high in the region of $1.2970, climbing some 50 points throughout the day.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\n<p> When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute. <\/p>\n<p> For example, it could be written: <em>1 GBP = 1.28934 USD<\/em> <\/p>\n<p> <em>Here, \u00a31 is equivalent to approximately $1.29. This specifically measures the pound\u2019s worth against the dollar. If the U.S. dollar amount increases in this pairing, it\u2019s positive for the pound.<\/em> <\/p>\n<p> Or, if you were looking at it the other way around: <em>1 USD = 0.77786 GBP<\/em> <\/p>\n<p> <em>In this example, $1 is equivalent to approximately \u00a30.78. This measures the U.S. dollar\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the dollar.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>The dollar was still under pressure after uninspiring Federal Reserve minutes from the interest rate decision meeting earlier in the week. The meeting left investors with no further clues as to when U.S. interest rates may be increased and highlighted concerns over softer inflation.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Adding to the dollar\u2019s woes were soft private payroll data, which fell short of analysts\u2019 expectation. Only 158,000 new private jobs were created in June, below the 185,000 forecast. The private payroll data is often considered a forecast for the monthly public and private jobs report, the non-farm payroll, which is the highlight of the economic calendar.<\/p>\n<p>The report today is expected to show that 180,000 jobs were created in June and that unemployment continues at the historically low rate of 4.3%.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>How does the non-farm payroll (NFP) affect the U.S. dollar? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>It works like this, when there is low unemployment and high job creation, the demand for workers increases. As demand for workers goes up, wages for those workers also go up. Which means the workers are now taking home more money to spend on cars, houses or in the shops. As a result, demand for goods and services also increase, pushing the prices of the good and services higher. That\u2019s also known as inflation. When inflation moves higher, central banks are more likely to raise interest rates, which then pushes the worth of the currency higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>However, the Federal Reserve and analysts are starting to question whether the relationship between low unemployment, high job creation and inflation has broken down, as wage growth fails to pick up at any meaningful level. If the wage growth reading is weak again today, then the dollar could take another step lower as the Fed\u2019s concerns over low inflation are confirmed for another month.<\/p>\n<p>Economic data aside, the markets will also be paying particular attention to the G20 summit. Any increase in geopolitical tensions over North Korea and it\u2019s continued efforts to develop nuclear weapons will be of particular interest. Trump has increased tensions further, saying he is considering some \u201cpretty severe things\u201d for North Korea, in response to the rogue nation\u2019s continued efforts to develop nuclear weapons. Trump\u2019s meeting with Russia\u2019s President Putin will also be under the spotlight. When geopolitical tensions rise the dollar tends to rise as investors seek its \u201csafe haven\u201d status.<\/p>\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Inc., Currency Live or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Today\u2019s movements in GBP\/USD will be all about the non-farm payroll figures from the U.S. However, other headlines will also be expected from the G20 summit in Hamburg, Germany, with political risk raising its head once more this week. The dollar is on the back foot against the pound going into the monthly jobs report. [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3841,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1394,1388,1398],"class_list":{"0":"post-3840","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gbp","8":"category-usd","9":"tag-gbp","10":"tag-jobs-data","11":"tag-usd"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Dollar Softer Versus the Pound Ahead of Monthly U.S. Jobs Report - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/100164-gbp-usd-soft-jobs\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100164-gbp-usd-soft-jobs\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100164-gbp-usd-soft-jobs\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Dollar Softer Versus the Pound Ahead of Monthly U.S. Jobs Report\",\"datePublished\":\"2017-07-07T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100164-gbp-usd-soft-jobs\\\/\"},\"wordCount\":860,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100164-gbp-usd-soft-jobs\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100164-gbp-usd-soft-jobs.jpg\",\"keywords\":[\"gbp\",\"Jobs Data\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100164-gbp-usd-soft-jobs\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100164-gbp-usd-soft-jobs\\\/\",\"name\":\"Dollar Softer Versus the Pound Ahead of Monthly U.S. Jobs Report - 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