Market Update
- July 8, 2021
GBP is set to at least hold it’s value throughout July with the freedom day of July 19th set to go ahead after being given the green light from Boris Johnson.
The main factor behind this decision is due to the correlation that vaccines are having on bringing down hospitalisations and deaths. Economically, GDP is released on Friday morning, expectations suggest GDP could reach over 5% with recent re-openings and vaccine boosted confidence leading to a better recovery than first thought.
A full re-opening of the economy later this month should also support a further surge in GDP throughout the 3rd quarter of the year.
The USD has continued its strength this morning off the back of The Fed Reserve’s minutes last night. Their last meeting had seen members back two rate hikes in 2023 with strong support for a first rate hike coming next year.
The minutes last night backed up this sentiment, with members indicating that conditions could be met somewhat earlier than they had previously anticipated. The strong economic recovery in The U.S. has allowed the plans for earlier rate hikes and focus today will be on the weekly unemployment data.
The number of Americans making new claims for unemployment benefits last week is seen to be dropping by 14,000 to 350,000 which is a new low throughout the pandemic. Alongside this figure, continuing claims are also expected to drop by 134,000 to 3.335 million.