Investors eyeing payroll data for direction
Tuesday 31 August, 2021
Daily Currency UpdateUSD - United States DollarThe pound and the euro benefitted from a slightly weakening dollar in early Tuesday trading, but month-end flows from investors rebalancing their portfolios gave USD a slight push. The US Dollar Index was up 0.07%, trading around 92.71 at the time of writing. Analysts will be watching Friday’s US payrolls numbers very closely for any signs that may prompt the US Federal Reserve to start tapering stimulus. With Powell highlighting the importance of a labor market recovery in guiding FOMC policy decisions, we are keenly attuned to any deviation from expectation as a possible catalyst to spark direction.Last week at the Jackson Hole Economic Symposium, US Fed Chair Jerome Powell said the central bank could ease bond-buying this year, but gave no clear timeline as to when this could start.
Key MoversStronger than expected Eurozone inflation pushed up the euro, but EURUSD fell off three-week highs after a US consumer confidence report disappointed market expectations. Dollar weakness also gave sterling a slight boost on Tuesday morning. GBPUSD broke through 1.38 briefly but fell down again to trade around 1.3757. Some analysts pointed to elevated COVID-19 cases in the UK and investors rebalancing their portfolios for month-end as factors for downward pressure on the pound.
- EUR/USD: 1.1794 - 1.1844 ▲
- GBP/USD: 1.375 - 1.3801 ▼
- AUD/USD: 0.7291 - 0.7341 ▲
- USD/CAD: 1.257 - 1.2651 ▲