The pound collapsed on Friday as markets were rattled by the contents of UK Chancellor Kwasi Kwarteng’s mini-budget.
The US dollar received a boost midweek when new employment figures were announced. The ADP employment report is often seen as an indicator of the later (and more influential) non-farm payrolls, so USD rose sharply after the data showed a respectable 177,000 new jobs were created.
The US Federal Reserve kept interest rates on hold at its latest monetary policy meeting, but the press release about the decision was much more upbeat than had been expected. This boosted hopes of a rate hike taking place in next month’s policy meeting, pushing the US dollar much higher.
Friday’s key US labour market report showed above-forecast growth in job creation, but the previous month’s figure was revised lower by almost the same amount as April’s exceeded expectations. On the plus side, unemployment fell from 4.6% to 4.4%, but hourly earnings growth slowed, which may bode ill for consumer spending. This kept the US dollar on sluggish form.
We have to wait until Friday for the big US releases of the week, including inflation figures, advance retail sales data and the University of Michigan consumer confidence survey results. However, numerous officials from the Federal Reserve will be making public appearances, so the US dollar could wobble on their comments if they sound particularly optimistic or pessimistic regarding the future path of interest rates.
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)