With the UK economy in turmoil after June’s Brexit results, the Bank of England unveiled a brand new stimulus package yesterday in order to combat the crisis of confidence in the UK. The Monetary Policy Committee slashed rates by 25 basis points to a new record low of 0.25%. The vote showed that the decision to lower rates was a unanimous 9-0. The Central Bank also restarted the Quantitative easing (QE) scheme by purchasing £60 billion of assets a month. This vote, however, was not unanimous as three members voted unsuccessfully against the decision. Sterling fell drastically after this release, crashing through two key psychological levels in the process.
Across the pond, the US released their weekly jobless claims figure. US labour data will be the main focus this week for the Greenback as the all-important Non-Farm payrolls are released this afternoon. Jobless claims which gives a clear indication of how the labour market is performing, posted a worse than expected reading of 269k. This is its highest reading this month. The Dollar remained stable after this release.
US labour data comes into focus on the last working day of the week. As this is the first Friday of the month, the NFP figure will be released along with the unemployment rate. The Fed have pointed to employment as an indicator to determine how the US economy is performing. Expectations are for 180k jobs to be added, a reading either side of this could see the Greenback gain or lose ground. Unemployment is set to improve and as the reading drops to 4.8% from 4.9%.