Sterling staged a mini fight back today as the GBP/USD cross climbed back to $1.66 this afternoon. With no economic data releases of any note coming from the UK the pound was at the mercy of events is the U.S. Luckily for Sterling, the U.S job numbers and unemployment figures failed to meet expectations forcing exchange rates from $1.6557 to $1.6603 in a matter of seconds.
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Once again the U.S job numbers (non-farm payroll) caused instant movement in the FX market. Analysts had been hoping the warmer weather would lead to more jobs being created in March and with a forecast number of 199K there were high hopes the reading would come in even higher. When the report was released at 13.30 GMT it showed the actual figure was 191K meaning the jobs sector has now missed its target three times in the last four months.
Today's figures will be another dent in the armour of the U.S. Federal Reserve who are looking for continued improvements in the U.S. economy in order to keep up with their current tapering efforts. A positive reading today could have easily seen GBP/USD back into the $1.64's but once again the dollar was unable to take advantage.
What could impact rates next week?
Monday – A quiet start to the week with no major releases from the U.S or UK.
Tuesday – Manufacturing data
and a GDP estimate from the NIESR for the UK.
New job openings and talks from two of the FOMC members from the U.S
Wednesday – Trade balance
data from the UK. Crude oil inventories, a treasury auction and minutes from the latest
FOMC meeting from the US.
Thursday – The BOE
announce their latest decisions on interest rates and quantitative easing
followed by a rate statement from the MPC. Unemployment data, import prices and a monthly treasury
statement from the US. The G20 meeting begins in Washington DC attended
by central bankers and financial ministers from 20 countries their initiatives
can have an effect on currency markets.
Friday – Again, no major
releases from the UK. Inflation data and a consumer sentiment survey from
the US. The G20 meetings conclude today.
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