Friday, 5 May 2017

The pound rises against the dollar despite positve U.S. job report.

In the last few minutes (1330 BST) the U.S. have just released their latest jobs report, and despite the reading coming in higher than forecast the GBP/USD cross has started to rise to come within touching distance of its highest level for over 6 months.

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As you can see from the graph below the GBP/USD exchange rate climbed to reach $1.2955, and after an excellent week of economic data from the UK, the pound has now completely wiped out the gains made by the dollar following Wednesday's Federal Reserve announcement.

GBP/USD chart

Why has the dollar weakened after a positive jobs report?

The dollar is often seen as a safe-haven currency and in times of uncertainty investors will head to the U.S. for extra security.

However, if the U.S. produce a strong piece of economic data investors will sometimes sell off the dollar and head towards riskier assets (such as the pound and euro), which is exactly what we have seen since the job report.

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