Today’s Currency News: Underwhelming Payrolls Report Drags on US Dollar (USD) Exchange Rates

Pound (GBP) Muted Following Dovish BoE Chatter

The Pound (GBP) was left rangebound at the end of last week’s session as another member of the Bank of England’s (BoE) Monetary Policy Committee (MPC) hinted at the possibility of an imminent rate cut.

Following dovish comments by BoE Governor Mark Carney on Thursday, Silvana Tenreyro suggested on Friday that the UK labour market is unlikely to tighten any further and that she would be supportive of a rate cut if the UK economy remains weak.

Looking ahead, the Pound is likely to start this week’s session on the back foot, with the UK’s latest GDP figures expected to show domestic growth stagnated again in November.

Euro (EUR) Directionless amid Lull in Data

The Euro (EUR) traded in a narrow range on Friday, with the single currency mostly directionless in the absence of any notable economic data.

Also suppressing movement in the Euro was the report that German car production fell to its lowest level in 23 years, another worrying signal that the Eurozone’s powerhouse economy continues to flounder.

On the docket for EUR investors this week is the release of the Eurozone’s latest industrial production figures, where an expected rebound in factory output could provide some modest support to the Euro.

US Dollar (USD) Stalls as US Payrolls Miss Expectations

The US Dollar (USD) struggled to find momentum at the end of last week as USD investors were dismayed by a weaker-than-expected US payroll report.

Not only did headline payrolls miss expectations in December, climbing by 145,000 against expectations of a rise of 164,000, but wage growth also disappointed, falling to its lowest levels since July 2018.

Coming up this week, the focus for USD investors will be on the latest US CPI figures, with the US Dollar potentially finding support if inflation prints robustly in December.

Canadian Dollar (CAD) Buoyed by Upbeat Employment Report

The Canadian Dollar (CAD) ticked higher on Friday, bolstered by a stronger-than-expected employment report, which revealed employment growth leapt from -71,000 to 35,000 in December.

However, these gains were trimmed somewhat by the continued fall in oil prices, as easing tensions in the Middle East saw WTI crude prices tumble to just $59 a barrel.

Australian Dollar (AUD) Buoyed by Safe-Haven Demand

The Australian Dollar (AUD) shot higher on Friday, spiking in response to broad USD weakness in the wake of the latest US payroll report.

The ‘Aussie’ has carried this momentum through to the start of this week’s session, with the currency being buoyed ahead of the signing of a ‘phase one’ trade deal between the US and China.

New Zealand Dollar (NZD) Strengthens amid Risk-On Trade

The New Zealand Dollar (NZD) also strengthened at the end of last week, with the drop in the US Dollar and easing tensions in the Middle East helping to support the risk-sensitive ‘Kiwi’.

Matthew Andrews

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