The US dollar stormed higher on Friday after the latest US non farm payroll figures stoked Federal Reserve rate hike bets.
Meanwhile, the pound opens this week on the front foot, with GBP/EUR buoyed at €1.1672 and GBP/USD ticking up to $1.2531. GBP/CAD is stable at C$1.5753 while GBP/AUD and GBP/NZD climb to AU$1.7384 and NZ$1.9232, respectively.
Looking ahead, Sterling may face some volatility today amidst reports Boris Johnson will face a no-confidence vote.
The US dollar rallied on Friday, strengthening on the back of the latest US payroll figures, with another robust print in April bolstering Federal Reserve rate hike bets.
What’s been happening?
This helped the ‘greenback’ reverse some of Thursday's losses, after demand for the safe-haven currency was curbed by a risk-on mood.
The euro was left on the back foot at the end of last week. Undermined by the publication of weaker-than-expected retail sales figures from the Eurozone.
Friday’s slump erased a good portion of Thursday’s gains and left the EUR/USD exchange rate to close the week close to its opening levels.
The pound, meanwhile, slumped through the second half of last week as UK political jitters in addition to thin trading conditions due to an extended Jubilee weekend left the currency vulnerable to its peers.
Turning to this week’s session, a key focus will be on the European Central Bank’s (ECB) latest interest rate decision.
What’s coming up?
While no policy changes are expected this month, the ECB is expected to shine more light on its plans to begin raising interest rates from July, which could reflect positively on the euro.
For USD investors the spotlight will be on the publication of the US consumer price index.
If May’s index reports another slowing of inflation it could give fuel to speculation that the Federal Reserve might pause its tightening cycle later this year and push the US dollar lower in the process.
In the meantime, the pound may struggle to attract support in the first half of the week, amidst reports a no confidence vote in Boris Johnson will be announced later today.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)