Never miss a market update. OFXpert commentary straight to your inbox
Dollar holds gains ahead of key US data
Daily Currency UpdateGBP/USD looks like it could soon test the key 1.20 level as the dollar advance continues. GBP/USD started the week at 1.2220 and it’s now around 1.5 cents lower as markets seek the safe haven dollar on the back of an expectation that central banks around the world (in particular the US Federal Reserve) will need to hold interest rates at their current elevated levels for an extended period. Stock markets around the world are feeling the brunt of the gloomy market sentiment on the prospect of borrowing costs remaining high and currencies deemed risky to hold in such times, such as the sterling, are depreciating as a result. There was little data from the UK over the past 24 hours to influence the pound’s value and it’s another quiet session today. We do have the final reading of September’s Services PMI due later this morning however no change from the preliminary reading of 47.2 is expected. GBP/USD is currently at 1.2075 with GBP/EUR continuing to trade sideways remaining just above 1.15.
Key MoversYesterday saw more positive jobs data from the States with the monthly Job Openings and Labour Turnover Survey showing an uptick with 9.61m jobs being available in September around 800k more than eyed. Although inflation in the States has fallen to the point that most expect no further rate hikes from the Federal Reserve the continued strong labour market and persistent wage growth continue to cause concern for investors as it can force consumer prices up if people have more money to spend. Today we have the monthly US ADP Non-Farm Employment Change reading for September ahead of Friday’s Jobs report with the key Non-Farm Payrolls figure predicted to fall slightly to 171k from the previous month’s 187k. This afternoon also sees the latest ISM Services PMI from the States with a drop to 53.5 pencilled in. The head of the European Central Bank, Christine Lagarde is due to give a speech this evening. As always investors will be looking for clues as to what may happen re: future interest rate moves. EUR/USD remains under pressure continuing to trade below 1.05. A move to 1.04 could be on the cards should this afternoon’s US data overshoot.
- GBP/USD: 1.2000 – 1.2220 ▼
- GBP/EUR: 1.1475 – 1.1590 ▲
- GBP/AUD: 1.9030 – 1.9200 ▲
- EUR/USD: 1.0400 – 1.0560 ▼
Want to stay ahead of market moves?
Subscribe to email currency updates from our OFXperts. We monitor global events and FX markets day and night, so you don’t have to.
* Required information
"*" indicates required fields