The US economy has announced better than expected jobs data for February at 242,000 new jobs created compared to the expectation of 190,000.
This has seen the Dollar strengthen against both Sterling and the Euro and providing some strength for the riskier commodity based currencies including the Australian Dollar, New Zealand Dollar and the South African Rand.
The reason for the movement is that as the US economy shows signs of strengthening this encourages global investors to move money into riskier currencies again.
The positive employment figures justify the Fed’s decision to increase interest rates a few months ago and we could even see interest rates go up again for the US this year.
Sterling Euro exchange rates will largely be influenced by two key events next week with the NIESR GDP estimate for the UK due on Wednesday and the ECB’s next interest rate decision to be held on Thursday.
Arguably the most important release will be the ECB meeting as there is a strong possibility of further Quantitative Easing.
If this happens then we could see Sterling rally vs the Euro and many with Euros to buy are waiting for 10th March to see what may happen if the ECB intervenes.
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