US Dollar Retreats Despite US Payrolls Beating Expectations

Pound (GBP) Rebounds against USD and EUR 

The Pound (GBP) bounced back against the US Dollar (USD) and the Euro (EUR) on Friday but dropped against most of its other peers. 

With the July 19 reopening of the UK economy looking likely to go ahead, despite rising cases of the Delta variant, Sterling was able to make some gains, though there were no market-moving events for GBP. 

This morning the UK’s final services PMI may boost the Pound, as the results are expected to indicate that the expansion of the UK’s service sector is still strong. Additionally, Boris Johnson will confirm that the lifting of most coronavirus restrictions will go ahead in two weeks’ time, which could also strengthen Sterling.

Euro (EUR) Falls on Dovish ECB Comments 

The Euro slipped through Friday’s session, following dovish comments from the European Central Bank (ECB) President Christine Lagarde. 

In an interview with French newspaper La Provence, Lagarde reiterated the ECB’s accommodative approach to monetary policy, adding that the economic recovery in the Eurozone ‘remains fragile.’ In response, EUR demand dipped. 

The services PMIs from Germany and the Eurozone may lend some support to the Euro this morning, as both show an increase in service sector activity from May to June. 

US Dollar (USD) Dips despite Impressive Non-Farm Payrolls 

The US Dollar dipped on Friday afternoon, despite the non-farm payrolls figures printing at 850,000, well above the 700,000 expected. 

The ‘Greenback’ fell victim to some profit-taking but managed to hold on to most of its weekly gains. 

With no notable data coming out of the US today, the US Dollar could be driven by risk appetite. The currency may also make gains as markets digest Friday’s payrolls data, as the release points to a continued robust recovery in the US economy. 

Canadian Dollar (CAD) Gains as Oil Prices Hold Steady 

The Canadian Dollar (CAD) climbed against most of its counterparts on Friday as the commodity-linked ‘Loonie’ was buoyed by strong oil prices, with WTI crude holding firm at around $75 a barrel. 

The upside was capped, however, by Canada’s balance of trade report, which revealed a trade deficit of CA$1.39bn in May, versus the predicted surplus of CA$0.37bn. 

Oil prices are likely to drive most movement in CAD today. Can WTI crude sustain its highs? 

Australian Dollar (AUD) Subdued on Coronavirus Outbreak 

The Australian Dollar (AUD) ticked lower in overnight trade, despite Australia’s retail sales growth beating forecasts of 0.1% to come in at 0.4%.  

The ‘Aussie’ was pressured by rising coronavirus cases in Australia, with the country imposing new restrictions as the Delta variant spreads. 

New Zealand Dollar (NZD) Down on Risk-Off Market Mood 

The New Zealand Dollar (NZD) trended slightly lower overnight, with a downbeat market sentiment dampening demand for the risk-sensitive ‘Kiwi’.