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USD slumps as US payrolls disappoint

currency-newsUSD slumps as US payrolls disappoint
The US dollar suffered a sharp selloff on Friday in the wake of an extremely disappointing payroll print.
Meanwhile, Sterling is off to a strong start this week, with GBP/EUR ticking up to €1.1588 and GBP/USD buoyed at 1.4072. GBP/CAD has climbed to C$1.7041, while GBP/AUD and GBP/NZD have advanced to AU$1.7910 and NZ$1.9324, respectively.
Looking ahead, with the UK set to confirm the next stage of lockdown easing later this evening, the pound looks likely to maintain momentum.

What’s been happening?

The US dollar plummeted at the end of last week’s session as USD investors were left dismayed by the latest US non-farm payroll release.
The highly influential jobs report revealed that payrolls only rose by 266,000 in April, far short of the nearly 1 million that economists had forecasted.
Coming alongside a downward revision to the number of jobs added in March, last month's abysmal payroll figures raised concerns over some slack in the US jobs market and triggered an aggressive USD selloff.
This slump in the US dollar bolstered the appeal of the euro on Friday thanks to the negative correlation between the pairing.
The single currency also received a boost from Germany’s latest industrial data after factory output rebounded at a faster-than-expected pace in March.
Meanwhile, the pound was able to register modest gains at the end of last week’s session as the Conservative party’s victory in the Hartlepool by-election helped to calm political uncertainty in the UK.

What’s coming up?

Turning to this week’s session, the initial focus will be on the UK government’s latest coronavirus press conference taking place later this evening.
This is expected to see the government formally give the go-ahead for more of the UK economy to reopen on 17 May and could help bolster Sterling sentiment.
For EUR investors the focus in the first half of this week’s session will be the latest ZEW survey from Germany, with the euro poised to fall if German economic sentiment deteriorates again this month.
Across the pond the spotlight this week will be on the US consumer price index. Economists forecast US inflation will have rocketed up to 3.6% last month, potentially putting pressure on the US dollar as the Federal Reserve remains reluctant to raise interest rates.
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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