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The pound is 0.6% higher against the euro and 2.4% higher against the US dollar since last Monday
After surging to a two-week high on Friday, the pound remains strong against the euro this morning and is currently 0.62% higher than last Monday.
Against the US dollar, the pound is up 2.40% since this time last week as it soared following the Bank of England’s decision to keep interest rates on hold.
On Friday, economists heard the US economy added 150,000 jobs in October, lower than forecasts of 180,000 and almost half of September’s downwardly revised 297,000. The non-farm payrolls report showed the labour market is slowly cooling as several strikes weighed on the manufacturing payrolls. While the figure was below the average monthly gain of 258,000, it remains well above the 70-100,000 needed to keep up with growth among working-age individuals.
The US unemployment rate came in slightly higher than expected at 3.9% in October, above forecasts and September’s reading of 3.8%. This marks the highest US jobless rate since January 2022.
US shares recorded their best week of 2023 on Friday as the S&P 4500 and the Nasdaq added 0.9% and 1.4% respectively, while the Dow Jones closed 222 points higher.
Late last week, UK services PMI was revised higher at 49.5 in October from estimates of 49.2, indicating a modest expansion in output, while the composite PMI came in slightly higher than expectations of 48.6, at 48.7 in October.
Factory orders in Germany unexpectedly rose 0.2% month-on-month in September, following a revised 1.9% surge a month prior. This beat market forecasts of a 1.0% decline and orders rose for machinery and equipment as well as metal products.
UK car sales rose by 14% in October, marking the 15th consecutive month of growth for the industry which has recorded supply chain issues since the start of the Covid-19 pandemic.
Later this week, we’ll receive the latest GDP figures for quarter three of 2023 for the UK, the Philippines and Indonesia. Spain, Italy, Brazil and Canada will release service PMIs and Germany will share industrial production updates.
In the US, there are several speeches from Federal Reserve officials, Michigan consumer sentiment index, and foreign trade data.
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GBP: GDP figures due on Friday
At the tail end of this week, the Office for National Statistics will release the gross domestic product figures for the UK for quarter three and year-on-year. Markets forecast a 0.6% loss for the annual rate and zero growth for the quarterly result.
GBP/USD: the past year
EUR: Unemployment rate rises to 6.5%
The euro area unemployment rate rose to 6.5% in September from 6.4% in August, slightly higher than expectations of 6.4%. The highest jobless rates in the euro area were observed in Spain (12%), Italy (7.4%) and France (7.3%).
USD: Services PMI at five-month low
On Friday, the ISM services PMI for the US fell to 51.8 in October, the lowest in five months and below a consensus of 53. Industries that saw slower increases include business activity & production, and employment.
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