DAILY FX WRAP: GBP briefly breaks 1.29 after strong jobs report, EUR slips on ECB source reports

GBP has once again been a key source of focus for markets amid the latest UK jobs report. GBP was bolstered and briefly broke above 1.29 to the upside amid the firmer than expected earnings numbers, unexpected fall in unemployment rate and fall in the claimant count rates; albeit wages still lag inflation by quite a distance, with real earnings at -0.5%, up from -0.9%.

EUR has faced some selling-pressure (EUR/USD back below 1.1750) in the wake of the latest ECB source comments with sources suggesting that Draghi will not use next week’s Jackson Hole Symposium to communicate a change in stance with markets and will instead hold-off until the Autumn. Elsewhere, the USD remains relatively steady with markets awaiting the latest FOMC minutes release.

AUD firmer amid cross related buying AUD/NZD which broke back above 1.08, subsequently taking the spot above 0.7850. Wage price index remaining firm, which also comes ahead of tonight’s employment figures. Alongside this, large vanilla options of 1.86bln and 910mln at 0.7830 to 0.7875 respectively rolled off at 3pm, consequently lifting AUD to intra-day high of 0.7892. Base metals also higher with Zinc at 10yr highs, while aluminium rose to its highest level since 2014. Much of this has stemmed from reports that China is stepping up moves to shut illegal aluminium and steel plants this year.

USD: Relatively quiet day for the greenback ahead of the FOMC meeting minutes, which looks set to guide price action. USD continued its modest strength from yesterday to hover above 94.00.  

16 Aug 2017 - 15:48- Research Sheet- Source: RANsquawk

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