There is a subdued reaction following the release of the UK employment claims moments ago where the claimant count unexpectedly fell by 8,600 and the UK unemployment rate remained steady at 4.9% for the month of July, which contradicts expectations that the EU referendum outcome would hit the domestic labour market. It does need to be taken into account that this week represents the first real week of economic data from the UK following the EU referendum outcome, therefore it is still going to be difficult to truly access what impact the Brexit result has had on the UK economy at this stage. To be honest, it is likely going to require a few more months to access how the vote is impacting UK businesses hiring on a consistent basis. A dramatic decline in the Sterling is already feeding through to increase import costs, but economists needs to continue analysing business confidence readings to then search for a correlation that should in theory lead to a decline in UK job vacancies.
Investors will now turn their attention towards the release of the latest FOMC Minutes on Wednesday evening. The Dollar is gradually attempting to recover its momentum after New York Federal Reserve President William Dudley made headlines on Tuesday by suggesting that a US interest rate rise could occur as early as September. These comments fit the ongoing narrative over the Federal Reserve wanting to maintain a public stance towards raising US interest rates in 2016, however you just need to monitor the ongoing reversal of interest rate expectations to understand that there is very little confidence from investors that the Federal Reserve will actually carry through with their intention to raise interest rates this year.