US jobs data to direct USD
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Daily Currency Update
UK construction in November saw its strongest rise in commercial activity for two and a half years, data showed yesterday. The release came in above the 50.0 benchmark, which separates contraction from expansion, beating both previous figures and forecasts with a reading of 55.2. However, new order growth eased to a five-month low.Employment data held the headlines in the US, as unemployment claims increased to 224k, which was higher than forecast. This data comes ahead of today's US employment report, which will be closely monitored by market participants to assess whether it will influence the Federal Reserve's interest rate decision for this month, due to be announced on Wednesday, December 18th.
GBP/USD has continued its upward trajectory, breaking 1.2750 in the past few hours. GBP/EUR has found a new range above 1.2050 and opened this morning at 1.2065. It has failed to break resistance at 1.2100. EUR/USD touched 1.0590 in the past 24 hours but failed to break 1.0600, opening at 1.0575.
Key Movers
The U.S. non-farm payrolls report for November, due later today, has market participants looking to gauge the pace of future Federal Reserve rate cuts. Payrolls are expected to have increased by 200,000 jobs last month, following a much smaller rise of just 12,000 in October, the lowest since December 2020. The unemployment rate is forecast to climb to 4.2%. Markets currently assign a 72% chance that the Federal Reserve will cut interest rates by 25 basis points when it meets on December 18th, up from 66.5% a week ago. Unemployment is currently at 4.1%, but a drop back to 4% could influence the Fed's decision later this month. USD movement will depend on this report today.Expected Ranges
- GBP/USD: 1.2640 - 1.2850 ▲
- GBP/EUR: 1.2040 - 1.2150 ▲
- GBP/AUD: 1.9690 - 1.9960 ▲
- EUR/USD: 1.0510 - 1.0630 ▲