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US job growth disappoints pushing the Dollar lower
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Daily Currency Update
The Euro concluded last week on a positive note, rising broadly following better-than-expected corporate earnings in France. Notably, Credit Agricole and Societe Generale delivered strong results, contributing to the currency’s upward trend. However, the possibility of a sustained Euro rally remains uncertain amidst market expectations of the European Central Bank initiating a 25-basis-point interest rate cut at their June meeting.Similarly, Sterling saw gains due to weakness in the US Dollar following a disappointing job report released on Friday. In the UK, March’s headline inflation rate dropped to 3.2%, while unemployment remained steady at 4.2%. Market consensus suggests that UK interest rates could hold steady at 5.25%.
In the US, manufacturing data (ISM) contracted last week for the first time in months. Coupled with slower job growth, this led to a decline in the Dollar against its counterparts. Market observers will closely monitor the Federal Reserve for any indications of a more dovish stance on interest rates.
Key Movers
Today in Germany, factory orders fell by 0.4%, contrary to market expectations of a 0.5% increase. This unexpected decline has temporarily restrained the Euro’s upward momentum. Additionally, Eurostat is releasing retail sales data for Europe today, with market forecasts anticipating a softer figure. Such a result could halt the recent gains seen in the single currency.On Thursday, the Bank of England will announce its interest rate policy. While no changes are anticipated, market attention will be on the committee’s voting pattern to gauge if any of the nine members express more dovish sentiments. Furthermore, UK GDP data is scheduled for release this Friday, with market expectations leaning towards a slight uptick to 0.4%.
The recent release of softer economic indicators in the US has reignited market speculation about potential interest rate cuts by the Federal Reserve this year. Later this week, Federal Reserve members John Williams and Thomas Barkin are scheduled to speak, likely setting the tone for future interest rate policy.
Expected Ranges
- GBP/USD: 1.2490 – 1.2565 ▼
- GBP/EUR: 1.1625 – 1.1675 ▼
- GBP/AUD: 1.8965 – 1.9040 ▼
- EUR/USD: 1.0720 – 1.0810 ▼
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