FX round-up: Cable weakens on follow-through selling, rand stronger

Cable was slightly lower on follow-through selling in the wake of the previous session´s strong reading on the state of the US jobs market.

As of 18:59 BST the pound was off by 0.23% to 1.3038 in its cross versus the US dollar.

Nonetheless, the results of two surveys in the UK appeared to give investors some reason to cheer.

Visa´s consumer spending index, calculated by Markit and based on credit and debit card usage, showed that spending increased 1.6% year-on-year in July, which was the biggest rise in three months and up from 0.9% in June.

A separate study also showed business confidence has not been as damaged by the Brexit decision as much as had been feared.

The BDO’s business optimism index fell to 97.9 in July from 98.9 the previous month.

However, BDO said the figures were better than expected, suggesting that the initial impact of Brexit has been less severe than anticipated.

Similarly, economic sentiment in the eurozone improved more than expected in August, according to the latest survey by Frankfurt-based research group Sentix.

The index gauging economic confidence among investors rose to 4.2 from 1.7 the month before, exceeding expectations for a reading of 3.0.

Sentix said: "The Brexit shock only lasted a short while. Worries about an economic slowdown have not grown further.”

Be that as it may, euro/dollar also moved lower, albeit by just a tad and was to be seen down 0.05% at 1.1080.

Overnight, data from the People´s Bank of China revealed that its FX reserves decreased just a smidgen in July, decreasing $4.1bn to $3,201bn (consensus: $3,200bn) as stable capital outflows and a higher trade surplus allowed the central bank to slow its FX sales.

Also in the emerging markets space, South Africa´s rand continued to appreciate as investors continued to greet reports that the ruling ANC´s grip on power might be loosening.

The grenback lost 1.0% to 13.5896 versus the rand.

Japan´s yen was also weaker, with the US dollar/yen cross up by 0.64% to 102.48 after unadjusted current account data for June revealed that the surplus shrank from the previous month´s mark of 1,809trn yen to 974.4bn yen (consensus: 1,103 trn yen).

In parallel, the spot US dollar index was edging higher by 0.23% to 96.417.