The pound starts the first week of September 0.5% up against the euro and 0.3% against the US dollar since this time last Monday.
After gaining close to 1% last week against the greenback, sterling tanked late Friday afternoon in the American session as US Treasury bond yields rose and reinforced the US dollar. It’s worth mentioning the US markets are closed today for Labor Day.
Other influential data from Friday includes US non-farm payrolls data for August, which showed 187,000 jobs were added, more than estimates of 177,000. However, the US unemployment rate rose to 3.8% year-on-year, exceeding the forecasted 3.5%.
In the UK, the S&P Global/CIPS manufacturing PMI revealed that British business activity remained in the red, dropping below the 50 threshold for the sixth consecutive month. This puts pressure on the Bank of England to pause its tightening cycle but as inflation remains close to 7.0%, economists foresee a 25-basis point rise in the September meeting.
British MPs have raised concerns that supermarket Asda’s ownership structure could be limiting the chain’s ability to support customers through the cost-of-living crisis. This comes after Asda was criticised by MPs for taking bigger profits from petrol.
As train strikes continued to wreak havoc this weekend, Aslef union boss, Mick Whelan said, “This is going to go on until the government gives us a solution.”
On the data front, this week is relatively quiet for the UK, with retail sales and final construction and services PMIs on Tuesday and the Halifax house price index on Thursday.
US economists will be keeping tabs on factory orders on Tuesday, which are forecast to decline, initial jobless claims on Thursday and a handful of speeches from Federal Reserve policymakers.
European data comes in fast this week as European Central Bank president, Christine Lagarde is due to speak tomorrow morning, and then German factory orders on Wednesday and GDP on Thursday.
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