US dollar subdued as US payrolls fall short of expectations

Pound (GBP) underpinned by BoE Pill comments

The pound (GBP) ticked higher at the end of last week, following hawkish comments from Bank of England (BoE) Chief Economist Huw Pill.

Pill’s remarks suggesting the bank isn’t in a place to declare ‘job done’ on inflation helped to temper expectations for further easing, following the BoE’s dovish interest rate cut on Thursday.

In the absence of any notable UK economic data, the pound may struggle to find direction today.

Euro (EUR) weakens as German data disappoints

The euro (EUR) faced headwinds on Friday in response to lacklustre German industrial data.

EUR investors were alarmed by a sharper-than-expected contraction in German industrial production in December, as it stoked concerns over the trajectory of the Eurozone’s largest economy.

Eurozone data is also in short supply today, which could limit movement in the euro through today’s session.

US dollar (USD) subdued as payrolls miss

The US dollar (USD) was subdued on Friday as the latest US payroll figures made for mixed reading. While job growth was weaker than expected last month, US unemployment actually fell.

The mixed jobs data supressed USD exchange rates as investors assessed the potential impact on Federal Reserve monetary policy.

Turning to the start of this week, the US dollar may strengthen as President Donald Trump’s latest tariff comments threaten to infuse fresh volatility into the currency market.

Canadian dollar (CAD) buoyed by unexpected fall in unemployment

The Canadian dollar (CAD) closed last week’s session on a positive note as a surprise fall in domestic unemployment last month helped to temper Bank of Canada (BoC) rate cut bets.

Canadian data is thin on the ground today. As a result, the ‘loonie’ is likely to track movements in oil prices.

Australian dollar (AUD) firms on tariff exemption hopes

After initially stalling on Trump’s threat to impose tariffs on all steel and aluminium imports, the Australian dollar (AUD) was able to bounce back overnight on hopes that Australia will be able to secure exemptions again.

New Zealand dollar (NZD) wobbles amid trade tensions

The New Zealand dollar (NZD) also fluctuated in overnight trade amid the market whiplash to Trump’s latest tariff remarks.

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