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US dollar rallies on surprisingly robust payroll print

currency-newsUS dollar rallies on surprisingly robust payroll print
The US dollar trended higher on Friday, bolstered by a stronger-than-expected US non-farm-payroll release.

Meanwhile, trade in the pound is mixed so far this morning, with GBP/EUR ticking up to €1.1844 and GBP/USD buoyed at $1.3549. GBP/CAD has stumbled to C$1.7227, while GBP/AUD and GBP/NZD slide to AU$1.9069 and NZ$2.0409, respectively.

Looking ahead, will continued political uncertainty in the UK cast a long shadow over GBP exchange rates this week?

What’s been happening?

The US dollar closed last week’s session on a positive note following the publication of the latest US payroll figures.

According to January’s non-farm payrolls, the US economy added 467,000 jobs versus the 150,000 forecast, while December’s figures were also revised up to 510,000.

The upbeat payroll report coincided with a prevailing risk-off mood, which further bolstered demand for the safe-haven US dollar.

The euro also firmed on Friday, with the European Central Bank’s (ECB) hawkish turn in the following its latest policy meeting continuing to act as a tailwind for the single currency.

The pound, meanwhile, retreated at the end of last week amidst fresh concerns over Boris Johnson’s premiership, following the resignation of five of the Prime Minister’s senior aides.

While Johnson attempted to frame the string of resignations as a clearing out of this top team in the wake of the ‘partygate’ scandal, it's clear patience within the Conservative party is beginning to wear thin, with some members calling for the PM to ‘shape up’ or go.

What’s coming up?

Kicking off this week’s session was the publication of Germany’s latest industrial production figures.

December’s release reported a shock contraction of factory production and could see the euro struggle to attract support at the start of the week.

Meanwhile, the pound is likely to remain sensitive to UK political developments. Expect to see the pound remain offered if headlines continue to cast doubt over Boris Johnson’s future as Prime Minister.

Meanwhile, in the absence of any notable USD data releases the US dollar is likely to be primarily influenced by market sentiment at the start of this week. Will fresh tensions over Ukraine help to buoy the appeal of the safe-haven currency?
Philip McHugh

Philip McHugh

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)

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