Currency news

Blowout jobs number supports USD

Head of FX Analysis at Equals Money
-
3
min read
Publish date
October 7, 2024
    • Fed rate cut expectations have eased further
    • USD likely to be supported this week


    Currency recap

    Hot US job numbers saw markets reduce the number of rate cuts expected by the Federal Reserve. While 75 bps of rate cuts was being projected by the end of the year, the number has now been revised to 50 bps. As a result, USD continued to gain with EURUSD breaching prior supports and GBPUSD reaching new lows.

    In contrast with Governor Bailey's comments the previous day, Bank of England's (BoE's) Chief Economist Huw Pill, said he was in favour of gradual rate cuts as opposed to the faster pace suggested by Bailey. This resulted in GBP gains early the following day.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.52% 1.9288
    GBPCAD 0.04% 1.7797
    GBPCHF 0.57% 1.1257
    GBPDKK 0.40% 8.9113
    GBPEUR 0.40% 1.1950
    GBPJPY 1.00% 194.7300
    GBPNOK 0.45% 13.9820
    GBPNZD 0.77% 2.128
    GBPSEK 0.60% 13.6040
    GBPUSD -0.13% 1.3100


    *Daily move - against
    G10 rates at 7:30am, 07.10.24

    ** Indicative rates - interbank rates at 7:30am, 07.10.24

    Key data points

    Currency Event Period Consensus Previous
    EUR Retails Sales MoM Aug 0.20% 0.10%
    EUR Retails Sales YoY Aug 1.00% -0.10%

    What we think

    We're expecting a fairly quiet week ahead, with Fed speak and US CPI numbers on Thursday. Last Friday’s job numbers have reduced the total number of rate cuts in the Fed’s monetary easing cycle, and, unless we see the CPI come in a lot lower than consensus this Thursday, then we would expect the USD to sustain its recent gains, especially with the continued tensions in the Middle East.

    Focus will also likely fall on the upcoming election which could see markets take a risk-averse stance, further enhancing demand for USD.

    For GBP this week, the only thing to really pay attention to will be August’s GDP numbers, expected to come in at 0.2%.

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