Following a shaky period for the US Dollar, investors are hoping that today's non-farm payrolls will pick up the pace on last month's figures. The below table provides GBP/USD exchange rate movements for the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBP/USD4.79%$11,860

FED leave interest rates unchanged

Wednesday evening the Federal Reserve (FED) left interest rates unchanged at 1%. This was no surprise as GDP grew by 0.7% in the first quarter of 2017 and therefore the slowest rate in the last 3 years.

However Chairlady of the FED Janet Yellen expects the slowdown to be temporary and in the future GDP will and I quote ‘expand at a moderate pace’. With this in mind the two further rate hikes that are predicted this year could actually materialise.

However in recent Fed meetings the Fed has made it clear they would look to gradually cut its balance sheet (debt).

However towards the end of Wednesday evening’s statement the Fed stated they will continue to reinvest the assets on the balance sheet, which is certainly a change of tune and in my opinion seems dovish. Even though Janet Yellen believes the slowdown is temporary, I don’t expect to now see a period of US dollar strength.

Non-Farm payroll and Unemployment rate to take centre stage

The first Friday of every month is the release of Non- Farm payroll numbers (number of jobs created in non-agricultural businesses) coupled with Unemployment rate (unemployed workers divided by the total civilian workforce) numbers. Apart from the monthly interest rate decision this period normally causes the most amount of volatility for US dollar exchange rates throughout the month.

Last month’s Non-Farm payroll numbers were a disappointment as the prediction was for 180k jobs to be created however the number was actually released at 98k. I expect this month’s figure to either hit the consensus of 180k or even to exceed it today therefore this could provide strength for the greenback. However unemployment numbers are set to disappoint clients that are holding onto US Dollars, as the rate is set to increase by 0.1% which could counteract the potential positive Non- Farm payroll numbers.

In any event if you have a requirement for the US Dollar, either buying or selling, get in touch with your dedicated broker ahead of the non-farm payroll figures so that we can plan around any potential spikes off the back of today's data. Call us on 01494 725353 or email me at drl@currencies.co.uk.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.