Daily FX Update – 9th January 2017
Price action at the end of the week was a little more subdued, although that being said, the Dollar picked up pace again following a few days rest.
US non farm payrolls came in weaker than expected at 156,000 against expectations of 178,000 although the slightly weaker than expected number wasn’t enough to throw the Dollar off its trajectory, particularly as the previous month was revised up by 19,000 jobs and more poignantly, the average earnings number posted it’s largest gain in 2 years growing by 0.4% for the month and 2.9% for the year. Unemployment remained at 4.7%. Ultimately, it was a good report and added credence to expectations of further rate hikes this year. For not at least.
As we begin the new week, it’s business as usual for the Dollar with the Pound taking the brunt of its force. Cable trades a critical short term level seen last at the end of October last year and GBPEUR has lost ground also, trading at 1.1550 as plans for Brexit still seem muddled, following Theresa May’s appearance on Sky News over the weekend together with Nicola Sturgeon solidifying that Scotland were not bluffing when it comes to a second Scottish referendum in case of a hard Brexit. A sustained break in Cable here does open the door to 1.2000 and below so caution is advised, particularly as rhetoric is likely to intensify as we approach the end of March timeframe for triggering Article 50. Brexit will supersede all positive data in this regard. Last week’s numbers being largely ignored is testament to this.
Focus for the week shifts to Donald Trump’s announced press conference this Wednesday. The calendar today is largely quiet although price action is already buoyant.
Have a good day.