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GBP/USD rebounds from 10-week low despite robust US payroll release

currency-newsGBP/USD rebounds from 10-week low despite robust US payroll release
The US dollar traded with modest losses on Friday as a stronger-than-expected US payroll reading failed to resonate with USD investors.

Meanwhile the pound opens this week on some strong footing, with GBP/EUR jumping to €1.1667 and GBP/USD soaring to $1.3832. GBP/CAD is rangebound at C$1.7086, while GBP/AUD and GBP/NZD have dipped to AU$1.8398 and NZ$1.9702 respectively.

Looking ahead, Boris Johnson’s is expected to announce that all coronavirus restrictions will be lifted from 19 July, which is likely to lend support to Sterling throughout the day.

What’s been happening?

The US dollar ticked lower at the end of last week’s session, following the publication of the latest US non-farm payroll report.

While June’s payroll figures printed above expectations, with the US economy adding 850,000 jobs versus the 700,000 forecast by economists, it also reported a disappointing rise in domestic unemployment over the same period, limiting the upside potential of the US dollar.

Meanwhile, the euro also trended lower on Friday, as the single currency was undermined by some dovish comments by European Central Bank (ECB) President Lagarde.

In an interview with local French daily La Provence said that while the Eurozone’s economic recovery is currently underway, its remains ‘fragile’.

At the same time, while the pound was able to strengthen against a weakened US dollar and euro, it struggled to repeat this success against most of its other peers as GBP investors remained cautious amidst concerns over the UK’s coronavirus situation.

What’s coming up?

Turning to the start of this week’s session, the primary focus is likely to been on Boris Johnson’s press conference later this evening, in which the PM is expected to announce the 19 July reopening will go ahead as planned, potentially propelling the pound higher.

Meanwhile EUR investors will be focused on the Eurozone’s latest PMI release, which is likely to reflect well on the euro if June’s finalised figures confirm growth in the bloc’s service sector rose to a 14-year high.

Across the pond, US markets will be closed for a public holiday, potentially leading to thin trading conditions in the US dollar, which may leave it vulnerable to its peers today.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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