Sterling lost nearly half a per cent against the dollar today as the U.S. posted better than expected job numbers this afternoon. As I mentioned in Wednesday's post the U.S. job figures usually cause some volatility in the FX markets and today was no different.
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At midday Sterling was sitting at $1.6783, the highest we have seen GBP/USD exchange rates since 17th February and very close the highest levels we have seen since 2009, but after the jobs data was released Sterling started to fall and by 4pm had dropped to a low of $1.6709.
It had been forecast that the U.S. had created 149,000 new jobs in February but the actual figure exceeded expectations and came in at 175,000. The gains for the dollar could have been greater had it not been for a survey showing that the number of long-term unemployed, that figure increased by over 203,000 compared to figures in January to leave 3.8 million people out of work.
So what can we expect for the GBP/USD cross now.
The rise in long-term unemployment will cause some concern for the U.S. Federal Reserve but overall they will be pleased with the recent economic numbers that are coming out of the States. Today's job numbers will lend some extra support towards the FED continuing to cut their on-going stimulus package when they meet later in the month.
Further cuts to the stimulus programme could see the dollar strengthen further which means we could see GBP/USD exchange rates back below $1.65 in the next few weeks.
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