Sterling opens the session little changed after the latest UK jobs and wages report showed that 730,000 people had lost their jobs between March and June this year, while the claimant count reached 2.7 million in July, an increase of 116.8% compared to March this year. The decrease in employment on the quarter was the largest quarterly decrease since May to July 2009. While the figures overall were not as bad as expected, unemployment is expected to jump sharply later in the year when the UK furlough scheme finishes at the end of October.

The Office for National Statistics (ONS) said that while employment is weakening and unemployment is largely unchanged, ‘there are some signs of economic inactivity rising with people out of work not currently looking for work compared with the last quarter’.

Wednesday’s preliminary Q2 GDP data (07:00 BST) now heaves into view and the numbers are expected to show the UK economy shrinking by 20%+ q/q due to the COVID-19 lockdown. According to a recent article published in The Times newspaper, BoE deputy governor Dave Ramsden said that while he was confident that there would be no more quarters of negative growth, the central bank stands prepared to increase QE to help boost the UK economy if needed.

GBP/USD remains trendless this week with the pair still stuck in Monday’s trading range of 1.3020 to 1.3106. GBP/USD does look as though it wants to press higher, aided in part by last week’s golden cross formation (50-dma rising through the 200-dma) but will likely wait for Wednesday’s data release. Additional short-term support appears between 1.2980 and 1.3008 before the 20-dma currently sitting at 1.2962.

GBP/USD DAILY PRICE CHART (JANUARY – AUGUST 11, 2020)

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