The US Dollar dipped on Friday, enabling both the Euro and Sterling to gain some upside. After a disastrous week Cable found itself back above 1.38 handle, and EURUSD above 1.1850. Despite investors recent demand for the safe-haven Dollar due to the rise in global Delta COVID-19 cases, a string of poor data has hindered the Greenback’s performance. At the end of last week, the US posted it’s latest weekly job report. Continuing Jobless Claims was forecasted at 3335K but missed expectations and came in at 3339K. Also, Initial Jobless Claims also missed the mark, coming in 23K above forecasts at 373K. While the Continuing Claims figure is not ideal for the US economy, the spike in Initial Claims is a cause for serious concern. Figures show that claims of new and emerging unemployment is on the rise and if it continues, the US Labour market could be devastated.
GBPUSD opened Friday at 1.3777 and was able to capitalize on a weaker Dollar, closing the week at 1.3833.
GBPEUR was also able to gain some upside on Friday. The pair started at 1.1642 and closed at 1.1659.
It was a similar story for EURUSD. The pair opened the session at 1.1833 and was able to surpass the 1.1850 mark, closing at 1.1864
Despite the Pound exhibiting some resilience to advance on the US Dollar on Friday, there are many reasons why odds are stacked against Cable moving into the new week. The most obvious is the rise (especially in the UK) of Delta COVID-19 cases. On Thursday the UK recorded 32,551 new COVID-19 cases, only to be surpassed on Friday with 35,707 new cases. Experts believe that 99% of the new cases are of the Delta variant. Brexit is also proving to haunt the Pound. The UK and EU agreed on a ‘truce’ over the Northern Irish protocol in the summer, but since then the EU have demanded different terms. The EU is now requiring ~€6B more than the UK is willing to pay. As many learnt since the Brexit vote, any negative news surrounding the topic usually leads to the Pound depreciating.