Fed-fueled dollar weakness has been overshadowing everything – Brexit, coronavirus, and political uncertainty. Next week, the all-important Non-Farm Payrolls and their full buildup are set to dominate, but British-related events are also of interest in the back-to-school week, FXStreet’s analyst Yohay Elam reports.
Key quotes
“Brits enjoy a bank holiday on Monday but brace for a busy September beginning Tuesday. Reopening schools without incidents nor backtracking is critical to supporting the recovery – as parents would be able to work without interruptions. It would also provide a sense of normality. COVID-19 statistics will also be followed and investors would like to see the current uptrend stall without risking overwhelming the health systems.”
“There are no official rounds of Brexit talks scheduled for early September, but the end of Europe’s holiday season implies a significant chance that officials will provide statements or talk to the press. Many expect a breakthrough only around the next EU Summit in October – or even closer to the last minute.”
“The economic calendar features several speeches from Bank of England officials, including Governor Andrew Bailey. As the BoE is set to remain on hold for some time, perhaps an unscheduled announcement about the furlough scheme – set to expire in October – would be of higher interest.”
“The US coronavirus case curve continues falling – but deaths remain at stubbornly high levels. While investors’ attention is on vaccines, cures, and fast tests, such statistics remain of high interest.”
“The highlight of the week is Friday’s Non-Farm Payrolls report for August, which is projected to show ongoing job restoration, but at a slower pace than July’s near 1.8 million increase. The unemployment rate is projected to edge down to just below 10%, albeit alongside a low participation rate. A slowdown in the recovery may weigh on the dollar, while an increase of closer to two million positions could boost it.”
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