The pound made solid gains vs. the greenback yesterday morning, this following the post FOMC dollar sell-off the previous evening. The pair came close to breaking fresh 4-month highs again but failed, as the USD gradually recaptured some of its losses with investors paring their positions ahead of the much-anticipated US Non-Farm Payrolls this afternoon. If the data re-affirms the more neutral direction of the Fed then the dollar could well come under further selling pressure this afternoon, reaffirmation being any print sub 150k.
Brexit headlines have been sidelined a little over the last 24 hours. Traders are waiting patiently for any signs as to who gives in first, or at least whoever gives a little first – the UK or the EU, or both, should negotiations go swimmingly.
Whilst US employment data is the immediate focus for cable traders, they’ll have half an eye on next week’s Bank of England monetary policy announcement. We’re seeing some commentary this morning suggesting they could toe a hawkish line following recent positive employment and price data, but they’re at least nailed on to leave interest rates on hold.