Amid the summer lull, should we keep an eye on the pound’s upside potential?

Amid the summer lull, should we keep an eye on the pound’s upside potential?

09.08.2021

Last weekend, stock prices rose in the U.S. market, creating a risk-on environment characterized by rising stock prices, higher interest rates, and lower oil prices. The U.S. employment report released on the 6th significantly exceeded market expectations, with nonfarm payrolls increasing by 943,000. The unemployment rate also fell from 5.9% to 5.4%, which had a positive impact on the market. In response to the U.S. employment report, yields on both long-term and short-term U.S. Treasury bonds have risen.

In the foreign exchange market, the U.S. dollar emerged as the strongest major currency, with the USD/JPY pair rising to 110.35. The GBP/USD pair fell, briefly touching 1.385, but the decline was limited due to the pound’s underlying strength. Since the pound is showing strength against the euro and Oceania currencies, we should remain cautious about chasing higher prices just in case.

Today, Germany’s trade balance is scheduled for release at 3:00 PM Asia time, followed by the U.S. JOLTS report and remarks by Bostic, President of the Atlanta Fed, at 11:00 PM U.S. time, and remarks by Barkin, President of the Richmond Fed, at 1:00 AM.Since markets in Singapore and Japan are closed today, please be cautious of sudden price fluctuations. Additionally, with the U.S. Consumer Price Index (CPI) scheduled for release on Wednesday, the 11th, and a general decline in market participants this week, please remain vigilant for sharp price movements.