Currency news

USD gains following job numbers

Head of FX Analysis at Equals Money
-
3
min read
Publish date
09/09/24
    • Market pricing now leaning towards a 25 bps rate cut
    • UK jobs, US CPI and ECB in focus this week


    Currency recap

    Friday's job numbers were a mixed bag: we saw fewer job additions than expected, an unemployment dip of 4.2%, and a wage growth 3.8% higher than projected. However, it's worth noting that last month's payroll number received a downward adjustment.

    At one point, following the numbers, markets increased their odds of a 50 bps rate cut by up to 50%; however, as the afternoon progressed sentiment shifted towards a 25 bps cut. Fed member Waller later commented advocating for 'front-loading' rate cuts.

    USD finished the day stronger, and GBP fell off its highs from earlier in the day.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.58% 1.9668
    GBPCAD 0.10% 1.7813
    GBPCHF -0.40% 1.1075
    GBPDKK -0.12% 8.8391
    GBPEUR -0.12% 1.1846
    GBPJPY -1.00% 187.0570
    GBPNOK 0.32% 14.0610
    GBPNZD 0.37% 2.1254
    GBPSEK -0.05% 13.5042
    GBPUSD -0.25% 1.3145


    *Daily move - against
    G10 rates at 7:30am, 09.09.24

    ** Indicative rates - interbank rates at 7:30am, 09.09.24

    What we think

    Focus this week will fall on the UK job numbers release due on Tuesday morning; US CPI on Wednesday afternoon and the ECB rate decision on Thursday.

    UK labour market data is expected to report average earnings (including bonus) of 4.1% and a slightly lower unemployment rate at 4.1%. With markets expecting US CPI to ease to 2.6%, year-on-year, while the core number remains 3.2%, CPI could determine what action the Fed takes this month.

    The ECB is widely expected to cut interest rates by another 0.25%, which is fully priced in by money markets. Therefore action on the EUR will be dictated by forward guidance and forecasts. Another potential catalyst for market movement is the US presidential debate between Kamala Harris and Donald Trump tomorrow evening.

    The USD is kicking off the week strong, building on Friday's momentum as market sentiment increasingly favours a 25 basis point rate cut by the Fed this month.

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