Amazing FBA Amazon and ECommerce Podcast, for Amazon Private Label Sellers, Shopify, Magento or Wooc

Amazing FBA Amazon and ECommerce Podcast, for Amazon Private Label Sellers, Shopify, Magento or Wooc


GBP steady, Amazon France Tax & "Amazon Choice" under Fire (Amazon Newsday)

August 14, 2019

GBP Latest: Strong Wage & Employment Data Provides Support, but Expect Any Strength to be Limited

The latest UK labour market data has beaten expectations, and should provide Sterling with some short-term support but we remain of the view any strength in the currency should ultimately remain limited in nature.

According to the ONS, Average Earnings - excluding bonuses - read at 3.9% in June, ahead of economist forecasts for a reading of 3.8% and the previous month's reading of 3.6%.

This is an 11-year high.

The Average Earnings Index - with bonuses included - for June read at 3.7%, in line with economist forecasts but above the previous month's 3.5% which was itself revised higher.

And, the better-than-expected numbers extended to the employment statistics where it was shown the UK workforce grew 115K on a the three-month-on-three-month basis in June, markets had only expected growth of 65K.

"While much of that was part-time employment, it is encouraging that firms have retained their workers, suggesting they expect activity to pick up again following the Brexit hangover in Q2," says Andrew Wishart, UK Economist with Capital Economics.

The UK unemployment rate nudged up unexpectedly to 3.9% in (the three months) to June. Consensushad been for a steady rate of 3.8% for the fourth consecutive month.
When it comes to currency markets, deviation from expectations move a currency, and the best on expectations should therefore be supportive of Sterling.
We are seeing some gains in the Pound following the release, with the Pound-to-Euro exchange rate trading at 1.0785, the day's low is at 1.0756. The Pound-to-Dollar exchange rate trading at 1.2067, the day's low is at 1.2042.

The Pound Advances on Reports 'Remainer' MPs Have Options to Block 'No Deal' Brexit

- GBP/EUR @ 1.0786 +0.56% | GBP/USD @ 1.2098 +0.64%
- MPs said to be working on credible route to preventing 'no deal' Brexit
- Sterling seen higher in Monday trade
- But gains tipped to be short lived
- However, IfG says ability of Parliament to block 'no deal' effectively not possible

Pound Sterling went higher on Monday in a move that coincides with fresh reports that there are in fact still credible routes that can be explored by MPs wishing to prevent a 'no deal' Brexit.
Sterling has been under pressure over recent days and weeks as it became increasingly clear that Prime Minister Boris Johnson could deliver a 'no deal' Brexit if he truly desired such an outcome, and all indications thus far in his young premiership suggest he is intent on doing so.
From a currency perspective, it is therefore likely that any suggestions that MPs do in fact still have options to thwart the Prime Minister's intentions would potentially prove supportive to Sterling.
"There were some developments on that over the weekend which could suggest some upside risk for the Pound," says Fritz Louw, a Currency Analyst with MUFG.
Louw references a report in the Times that says "MPs are drawing up plans to compel Boris Johnson to break his “do or die” pledge and force him to request an 11th-hour Brexit extension from the European Union.