US Dollar (USD) Jumps as Jobs Data Beats Forecasts
The US Dollar (USD) surged higher yesterday after strong US jobs data boosted expectations that the Federal Reserve will need to raise interest rates higher.
The ADP employment change figure printed at 235,000, smashing forecasts of 150,000, while initial jobless claims unexpectedly declined.
Today, the non-farms payroll report is in focus. If it beats expectations like the ADP report did, the ‘Greenback’ could soar.
Pound (GBP) Weakens amid UK Economy Woes
The Pound (GBP) struggled yesterday as GBP investors grew increasingly concerned about the UK’s economic outlook.
The UK’s final services PMI printed marginally lower than previous estimates, showing that the country’s vital services sector remained in contraction last month. Meanwhile, industrial action across the UK continued to intensify.
A lack of notable UK data through the remainder of today’s session could see Sterling trade on domestic news. Will concerns about the UK economy continue to pressure GBP?
Euro (EUR) Undermined by PPI Decline
The Euro (EUR) managed to rise against its riskier peers yesterday as market sentiment soured in the afternoon.
However, EUR’s negative correlation to a strengthening US Dollar and a decline in Eurozone PPI saw the single currency slip against its stronger rivals.
Looking ahead, the Eurozone flash inflation rate this morning could create headwinds for EUR. Economists expect the reading to ease for the second consecutive month, which may dampen European Central Bank (ECB) interest rate rise bets.
Canadian Dollar (CAD) Firms as Bond Yields Rise
The Canadian Dollar (CAD) strengthened yesterday, lifted by a jump in Canadian government bond yields following the US jobs data.
Canada’s own employment reports are due out today. An expected rise in the unemployment rate could dent CAD.
Australian Dollar (AUD) Rangebound amid Muted Risk Appetite
The Australian Dollar (AUD) traded narrowly overnight as a tepid market mood left the risk-sensitive ‘Aussie’ without a clear direction.
New Zealand Dollar (NZD) Fluctuates in Thin Trading Conditions
The New Zealand Dollar (NZD) also moved without a clear direction overnight amid the mixed mood and a lack of data.