The British pound has resumed its upward movement in the Thursday session. In North American trade, GBP/USD is trading at 1.3094, up 0.40% on the day. On the release front, British Halifax HPI picked up speed, with a strong gain of 1.1%. This easily beat the estimate of 0.2%. In the US, unemployment claims jumped to 298 thousand, well above the estimate of 245 thousand. On Friday, the UK releases Manufacturing Production, which is expected to improve to 0.3%.
The red-hot US labor market appears to have cooled off, as recent employment indicators have been weak. On Thursday, unemployment claims jumped to 298 thousand, the highest level since April 2015. This follows weak readings in July for nonfarm payrolls and wage growth. However, the sharp rise in jobless claims can be attributed to Hurricane Harvey, which led to thousands of displaced workers in Texas filing for unemployment benefits. Unemployment numbers could remain high in upcoming weeks, until flooded areas are able to get on their feet and reconstruction projects begin, which should translate into lower jobless numbers.
One of the biggest losers in the Brexit saga will be the City of London, which stands to lose its status as the primary financial hub in Europe. There are plenty of players across the Channel casting an eye on the spoils after Britain leaves the European Union. Frankfurt and Dublin are the two main contenders, with Paris and Amsterdam are also hoping to lure large financial companies when they downsize operations in London. On Wednesday, Deutsche Bank chief executive John Cryan argued that Frankfurt is ideally suited to take over from London as the financial hub for European banks, saying it has the structures in place to take over from London. Analysts estimate that London could lose up to 30,000 jobs in the financial services sector, with clients moving up to 1.8 trillion euros in assets from the UK to the continent. Germany could gain 30% of these jobs, which would mark a huge post-Brexit boon for the country.
