The pound remained buoyant on Tuesday but struggled to find meaningful gains on the back of some mixed employment figures.
Support for the US dollar also weakened in the wake of August’s durable goods orders figure last week, which saw a sharper slowdown in growth on the month than forecast.
Growth of just 0.4% in the wake of July’s solid 11.7% increase suggests that the US economy has already started to lose some of its initial recovery momentum, reducing the odds of a stronger second half of the year.
While manufacturing sector data showed greater signs of resilience, this failed to offer USD exchange rates any particular boost.
The first televised presidential election debate between Donald Trump and Joe Biden will likely drive movement in USD this week, with political tensions and uncertainty rising ahead of the November election.
If the finalised second quarter gross domestic product report released on Wednesday confirms that the economy experienced a significant -31.7% contraction, this may limit the upside potential in the US dollar.
Greater volatility looks likely on the back of September’s non-farm payrolls report on Friday, particularly if the accompanying unemployment rate fails to impress.
As long as the US labour market shows signs of vulnerability, this could keep USD exchange rates biased to the downside in the near future.
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)