The pound traded with modest gains on Friday as GBP investors reacted to the latest UK GDP release.
This weakness in USD exchange rates was present from the very start of the session, amid lingering disappointment over Federal Reserve, Chair Jerome Powell’s speech at the Jackson Hole summit the previous week, after he remained coy on when the bank might actually begin tapering its bond buying programme.
The publication of the latest ADP employment report then reinforced the USD selloff in the middle of the week, after August’s figures printed well below expectations.
The ‘greenback’ then limped over the finishing line on Friday with the release of the latest US non-farm payroll report. These revealed the US economy only added 235,000 new jobs in August, well below the 750,000 that had been forecast.
This stoked concerns that the Delta variant may be impacting the US economy more than previously thought and could make the Fed more hesitant to start its tapering plans.
Turning to this week’s session, a lull in notable US data releases could see the direction of the US dollar dictated mostly by market sentiment, potentially leading to additional losses for the ‘greenback’ if the risk-on mood continues to prevail.
Last week’s initial jobless claims look to be the highest impact US data release of the week. Will the continued downtrend in new claims help the US dollar to claw back some ground later in the session?
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)