Currency news

Test for USD with job numbers

Thanim Islam
Profile
Head of FX Analysis at Equals Money
-
3
min read
Publish date
03/05/24
    • Apple results lift the mood in markets
    • Job numbers to dictate USD moves


    Yesterday's currency recap

    GBP continued to drop across the board yesterday despite no major news or data in the markets. USD traded within a tight range over the course of the afternoon, but following positive results from Apple last night, we saw a rise in equity futures which has resulted in weakness in USD ahead of today's job numbers.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD -0.51% 1.9102
    GBPCAD -0.50% 1.7130
    GBPCHF -0.58% 1.1402
    GBPDKK -0.12% 8.7120
    GBPEUR -0.12% 1.1681
    GBPJPY -0.63% 192.2540
    GBPNOK -0.25% 13.7984
    GBPNZD -0.36% 2.1048
    GBPSEK -0.50% 13.6264
    GBPUSD -0.18% 1.2506

    *Daily move - against G10 rates at 7:30am, 03.05.24

    ** Indicative rates - interbank rates at 7:30am, 03.05.24

    Key data points

    Currency Event Period Consensus Previous
    USD Nonfarm Payrolls Apr 240,000 303,000
    USD Unemployment Rate Apr 3.80% 3.80%
    USD Average Hourly Earnings MoM Apr 0.30% 0.30%
    USD Average Hourly Earnings YoY Apr 4.00% 4.10%
    USD S&P Services PMI Apr 51.00 50.90
    USD S&P Composite PMI Apr 51.00 50.90
    USD ISM Services Index Apr 52.00 51.40

    Upcoming speeches

    • None today.

    What we think

    Following on from the Fed meeting on Wednesday, today's job numbers will be closely scrutinised on whether the data supports the idea that we could see a Fed rate hike this year. Should that be the case then this could well be the start of the 15-year seasonal trend where USD tends to outperform during the month of May. Should the numbers show some loosening in the job market, then we could see further moves beyond resistance levels on GBPUSD and EURUSD. Markets are expecting 240,000 job additions in April, down from 303,000 in March.

    Chart of the day

    Whilst past performance is not indicative of future results, seasonal trends are still worth considering when looking at the implications on FX rates. As an example, GBP has finished lower versus USD during May in 12 out of the past 15 years, and in general USD has tended to outperform in May the same 15-year period. With Fed Powell suggesting current data does not indicate a rate hike by the Fed, could today’s job numbers contribute towards a lower move on GBPUSD?

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    About the author
    Thanim Islam
    Profile
    Head of FX Analysis at Equals Money

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