GBP price, UK jobs data and Brexit:
- UK redundancies surged in Q3 and the unemployment rate jumped in September, according to the latest labor-market data.
- However, GBP/USD held its ground and EUR/GBP actually dipped.
- So far, FX has largely ignored the Pfizer vaccine news, with little sign of a move from safe-havens like the US Dollar into assets like the British Pound that are seen as inherently riskier.
- As for Brexit, this has been called yet another crucial week and there has been no indication yet of a breakthrough in the EU-UK trade talks.
GBP/USD shrugs off UK employment data
UK redundancies hit a record high in the third quarter, according to the latest labor-market data, while unemployment hit its highest level for almost four years in September. However, there was little reaction in GBP/USD, which remains stable around the 1.32 level, while Sterling actually advanced against the Euro, sending EUR/GBP lower.
EUR/GBP Price Chart, One-Hour Timeframe (November 2-10, 2020)
Source IG (You can click on it for a larger image)
The UK jobs figures were not hugely surprising given the damage caused by the coronavirus to the UK economy and worse may still be yet to come as the current lockdown works its way into the numbers.
Source: DailyFX calendar
| Change in | Longs | Shorts | OI |
| Daily | -29% | 23% | -10% |
| Weekly | -35% | 64% | -7% |
Meanwhile, currencies have barely responded to the news this week that US pharma company Pfizer has developed a Covid-19 vaccine that is more than 90% effective based on initial trial results. The principal impact Monday was on stock markets, where a rotation into the shares of companies like airlines that have been hit hardest sent them surging in heavy volume. Conversely, there were falls in the shares of companies that have gained from the pandemic, such as Netflix and Zoom
Brexit still in the limelight
As for Brexit, the UK Government was defeated Monday in the House of Lords on its Internal Market Bill that would breach international law. That defeat will likely be reversed in the House of Commons so should do little damage to the Pound. Also, the latest talks between the EU and the UK on their future relationship still show little sign of a breakthrough though hopes remain of a skeleton agreement that can be fleshed out later.
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--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
