US Dollar (USD) Soars on Strong Employment Data
The US Dollar (USD) surged higher at the end of last week following strong jobs data. July’s non-farm payrolls printed at 528,000 – over twice the forecast 250,000 – while the US unemployment rate unexpectedly fell to 3.5%.
These strong results saw markets scramble to price in continued aggressive action from the Federal Reserve, sending USD skyrocketing.
Amid today’s lack of data, the safe-haven ‘Greenback’ will likely move in relation to market risk appetite.
Pound (GBP) Slips as Post-BoE Headwinds Persist
The Pound (GBP) fell against the majority of its peers on Friday as the currency continued to reel from the Bank of England’s (BoE) warning of a coming recession.
In addition, a lack of UK economic data and ongoing political instability left Sterling vulnerable to losses.
With data releases still thin on the ground today, the risk-sensitive Pound may trade primarily on market mood.
Euro (EUR) Muted despite Strong German Data
The Euro (EUR) traded in a mixed range on Friday, as the currency’s negative correlation to a strengthening US Dollar offset some positive German data.
Industrial production in Europe’s largest economy grew by 0.4% in June, rather than contracting by 0.3%. The increase came amid a relaxation of Covid restrictions in China, which thereby boosted export demand.
There’s no Eurozone data due out today, so EUR may trade on sentiment around the Russia-Ukraine crisis and Europe’s gas shortage.
Canadian Dollar (CAD) Capped by Falling Oil Prices
The commodity-linked Canadian Dollar (CAD) fluctuated against its peers on Friday as a better-than-expected unemployment rate and softening oil prices created mixed trading signals.
Today, oil price dynamics could dominate movement in the crude-linked Canadian Dollar.
Australian Dollar (AUD) Firms amid Risk-On Mood
The Australian Dollar (AUD) strengthened overnight as a fairly upbeat market mood boosted the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Undermined by Inflation Expectations
The New Zealand Dollar (NZD) wavered overnight. While a risk-on market mood supported the ‘Kiwi’, a drop in business inflation expectations may have dampened rate rise bets from the Reserve Bank of New Zealand (RBNZ).