US dollar soars as US payrolls smash expectations
Philip McHugh October 7th 2024 - 2 minute read
Pound (GBP) firms as BoE Pill tempers rate cut bets
The pound (GBP) mounted a recovery at the end of last week’s session, following comments by Bank of England (BoE) Chief Economist Huw Pill.
Pill sought to temper interest rate cut speculation a day after BoE Governor Andrew Bailey triggered a sharp plunge in the pound by suggesting the bank may become more aggressive in cutting rates.
In the absence of any notable UK economic releases, Sterling may struggle for direction at the start of this week’s session.
Euro (EUR) undermined by dovish ECB comments
The euro (EUR) stumbled on Friday as it was pressured by its negative correlation with the US dollar as well as dovish comments by a European Central Bank (ECB) policymaker.
Bets for another rate cut from the ECB this month were bolstered after Mario Centeno suggested that Eurozone inflation is now under control.
Looking ahead, the publication of Germany’s latest industrial data may act as a headwind for the euro this morning, after they reported factory orders contracted at a startling pace in August.
US dollar (USD) jumps on bumper US payroll figures
The US dollar ended last week on a high note as a bumper non farm payrolls print showed the US economy added 254,000 jobs in September.
This suggests the US labour market is far stronger than previously feared, with USD exchange rates firming as investors continued to rein in bets for another 50bps interest rate cut from the Federal Reserve next month.
Turning to the start of this week, the US dollar is likely to maintain a positive trajectory so long as tensions in the Middle East continue to spook investors.
Canadian dollar (CAD) firms on impressive Ivey PMI
The Canadian dollar (CAD) was supported on Friday by the publication of the latest Ivey PMI as it reported a stronger-than-expected rebound in Canadian private sector growth last month.
CAD data is in short supply at the start of this week, likely leading movement in the ‘loonie’ to be driven by oil price dynamics. If prices continue to rise, the Canadian dollar may strengthen.
Australian dollar (AUD) subdued in cautious trade
The Australian dollar (AUD) was muted in overnight trade, as negative risk flows left the currency to nurse its losses from the end of last week.
New Zealand dollar (NZD) muted amid risk-off mood
The New Zealand dollar (NZD) also struggled to attract support during the overnight session amid the cautious market mood.
Written by
Philip McHugh