The pound consolidated against its major rivals during the overnight trade before the producer prices for June will be published at 9:30. The cost of goods at factory gates increased by 0.1% from May, when they gained 0.2%, indicating that UK producer price inflation have slowed in June. Sterling also came under pressure after National Institute of Economic and Social Research (NIESR) said that economy barely grew in second quarter of 2010. The institute estimated GDP growth in three months to June increased only by 0.1%, down from 0.5% in first quarter. Construction data for May, which will feed into the preliminary estimate of Q2 GDP will also be published today.
The dollar gained across the board during the Asian session as investors run into the safety of the US currency before the Non-farm payrolls release scheduled for today. Analysts forecast employers in US added more jobs in June than in the prior month, indicating the pick up trend in the labor market. Payrolls most probably rose by 105,000 workers after a 54,000 increase in May that was smallest in eight months. However, the projected gain will probably fail to reduce the headline unemployment rate, which is forecasted to remain unchanged at 9.1%. Fed officials have said the slowdown in economic growth in the first and second quarters partly reflected temporary factors and expect a slight rebound for the reminder of the year.
Comments