Economic Data from the UK and the U.S Put the Pound and the Dollar in Focus

Earlier in the Day:

It was a particularly busy start to the day on the economic calendar this morning. While the Aussie Dollar was in action, economic data from China was the key driver early on. Later this morning, economic data from Japan will also be in focus.

For the Aussie Dollar

Employment rose by 29.1k in June, following a 115.2k jump in May. Economists had forecast a 25k increase in the month.

Full employment jumped by a further 51.6k, following a 97.5k increase in May. Economists had forecast a more modest 35.0k rise.

As a result, the unemployment rate fell from 5.1% to 4.9% in June.

According to the ABS,

• The unemployment rate was 0.4 percentage points below March 2020 and at its lowest since December 2020.
• In June, the number of unemployed fell by 22,000 to 679,000, which sits around 325,000 below a peak 1 million reached in July 2020.
• While the unemployment rate declined to sub-5% levels, the participation rate held steady at 66.2% in the month. This was just below its historical high 66.3% in March 2021.
• On the negative front, however, the underutilization rate rose by 0.3 percentage points to 12.8%. This was the first increase in the underutilization rate since September 2020.

The Aussie Dollar moved from $0.74707 to $0.74701 upon release of the figures, which preceded data from China. At the time of writing, the Aussie Dollar was down by 0.16% to $0.74641.

From China

In June, retail sales rose by 12.1%, year-on-year versus a forecasted 11.1% rise. In May, sales had been up by 12.4%.

Industrial production increased by 8.3% versus a forecasted 8.0% rise, year-on-year. In May, production had been up by 8.8%.

More significantly, however, were 2^nd quarter GDP numbers.

Quarter-on-quarter, the Chinese economy expanded by 1.3%, which came up short of a forecasted 1.4%. In the 1^st quarter, the economy had expanded by 0.6%.

Year-on-year, the economy expanded by 7.9%, which was softer than 18.3% growth in the 1^st quarter. Economists had forecast growth of 8.3%.

The Aussie Dollar moved from $0.74635 to $0.74644 upon release of the figures.

For the Japanese Yen

Tertiary industry figures for May are due out later today. We don’t expect any Yen sensitivity to the numbers, however.

At the time of writing, the Japanese Yen was up by 0.01% to ¥109.960 against the U.S Dollar.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.41% to $0.70040.

The Day Ahead

For the EUR

It’s a particularly quiet day ahead on the economic data front. Finalized June inflation figures for Italy are due out later this morning.

We don’t expect the numbers to have any material impact on the EUR, however.

At the time of writing, the EUR was down by 0.09% to $1.1826.

For the Pound

It’s another busy day ahead on the economic calendar, with UK employment figures due out later this morning.

Claimant counts for June and May’s unemployment rate will garner plenty of interest.

At the time of writing, the Pound was down by 0.25% to $1.3825.

Across the Pond

It’s a busy day ahead on the economic calendar. Manufacturing sector data from NY State and Philly are due out along with the weekly jobless claim figures.

Later in the day, industrial production figures are also due out. On the economic data front, expect the jobless claim figures to be key.

On the monetary policy front, FED Chair Powell delivers a 2^nd day of testimony that will also need monitoring.

At the time of writing, the Dollar Spot Index was up by 0.06% to 92.466.

For the Loonie

It’s a quieter day ahead on the economic data front. ADP employment change figures are due out later today.

With little else for the markets to consider, following Wednesday’s BoC policy decision, expect Loonie sensitivity to the numbers.

Away from the economic calendar, however, COVID-19 news will also need monitoring.

At the time of writing, the Loonie was down by 0.23% to C$1.2538 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.