Non-farm Payroll (NFPR) data is released today and details the latest news for US unemployment statistics. Today’s data will be key in providing some guidance as to which direction the US economy is headed. The US dollar has been marginally weaker as investors shy away from the very high expectations placed on the currency and the US economy this year.
GBP/USD levels have been above 1.31 today and depending on how the NFPR figures fare today, could weaken further. The last figures showed just 20k new jobs created in non-agricultural employment, with figures in the last year peaking at 300k showing a significant shift.
The pound is remaining fairly range-bound against the US dollar, as the markets await firmer news on Brexit. Currently the UK is awaiting further confirmation of an extension from the EU, with the marker being set for a longer delay, if the EU agree at next week’s emergency EU Summit.
Lately on the currency markets, the expectation is that we will see a more volatile currency market as investors shy away from uncertainty elsewhere. The US dollar is a safe haven currency and will often rise in value in times of uncertainty. Whilst it has been slightly weaker, as the US economy fails to meet the high expectations placed on it, we could see it rising in value as the market begins to fear other currencies and economies in potentially worse positions.
We could see the US dollar strengthen later today if the data is positive, which might see GBP/USD interbank levels fall below 1.30. Another concern I share is the increased prospect of a Corbyn government which could see the pound lose value, with the uncertainty that comes with another potential change of direction when it comes to Brexit negotiations.
Please feel free to contact me further to discuss how today’s NFPR could influence GBP/USD exchange rates, plus what we can expect for the future as a result of the Brexit. You can get in touch using the form below to ask for more information.