UK Unemployment Rate Stays Steady at 4.4%
The UK unemployment rate for May is forecasted to stay the same at 4.4%, unchanged from the previous data and forecast. This kind of stability in labour likely suggests that the economy is merely holding current levels of employment without any significant amount of job losses or gains. A steady reading for unemployment could bolster the GBP as it shows ongoing stability in the economy.
Later today the European Central Bank interest rate decision later today is expected to leave rates at 4.25%. Should the ECB, as widely expected, decide not to move for a more cautious approach toward monetary policy, this will strike a delicate balance between taming inflationary pressures and underpinning economic growth. This can affect the EUR depending on how the accompanying ECB text sets the scene for future economic conditions and policy directions.
Major Currency Pairs
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- EUR/USD:The Euro has shown mixed performance against the USD. Traders are focused on the ECB’s interest rate decision, which could significantly impact the pair’s direction (DailyFX).
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- GBP/USD: The British Pound remains strong against the USD but is struggling to break above key levels. The upcoming UK unemployment data will be crucial in determining the next move for this pair (DailyFX).
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- USD/JPY: The Yen has weakened slightly against the USD, influenced by dovish comments from Fed Chair Powell. Speculation about possible intervention by Japanese officials to support the Yen is ongoing (DailyFX).
Commodity Prices
- Oil: Crude prices of the US are strong, as multiple economic indicators and geopolitical developments provide support to the market. Participants, however remain cautious ahead of further data releases.
- Gold: The price of gold surges closer to its previous record highs as growing expectations of a rate cut by the Fed in September prove to be positive. The precious metal remains in demand for safe-haven flows against economic uncertainties.
Political and News Update
UK Political
Yesterday, the UK government prepared for the European Political Community (EPC) meeting at Blenheim Palace. This significant event brought together around 50 European leaders to discuss shared challenges, including support for Ukraine and addressing illegal migration. Prime Minister Rishi Sunak emphasized the importance of this meeting for fostering European cooperation on critical issues (DailyFX).
US Political
The US remains charged with former President Trump recuperating from an assassination attempt, while JD Vance will address the Republican National Convention, pointing toward the strategy and vision laid down by the party for the approaching elections, (Hindustan Times).
Violence in Kenya
Kenya still witnesses large-scale unrest as anti-government protests persist in the country. The protests in Nairobi yesterday closed businesses but concurrently showed the deep-seated political and social malaise that has currently emerged in that country (Nation).