All eyes on this afternoons non-farm payrolls, which could result in the FED increasing interest rates in the weeks ahead.

Surprisingly poor US data causes USD weakness

The Pound strengthened by over 2 cents against the USD during yesterday’s trading session, providing the best opportunity to buy Dollars in almost a month. This was after US manufacturing data from both Markit and ISM (Institute for Supply Management) showed a downturn since July, with the ISM reading showing the biggest drop in more than 2 years. Initial Jobless claims showed a slight fall, with an additional 2000 people filing first time claims for unemployment since last week. Construction spending was also down from the previous month, and the triple whammy of poor US data, combined with excellent UK Manufacturing data, provided Dollar buyers with a great opportunity to act on.

This afternoon, Unemployment Rate and Non-Farm Payrolls for August will be keenly watched, as the gains made yesterday could be quickly reversed if these releases are positive. The report is expected to show solid gains in US jobs for August and this could potentially give an insight into whether the FED raise interest rates in September.

Clues that the US could raise Interest Rates in September?

During a speech last week, FED chairlady Janet Yellen mentioned that, as the case for an interest rate raise has increased in recent months, there would only need to be solid gains in jobs added, rather than an extraordinary figure, to warrant the first raise since 2016.

After such a busy week of data releases this week, next week appears to be a little lighter on US data. Markit Services and ISM Non-Manufacturing data on Tuesday are expected to show an increase since last month, the FED’s Beige Book on Wednesday will provide a general overview of the US economy, and Thursday afternoon will show last week’s Initial Jobless Claims. If you would like to find out more about how economic data and political events can impact a currency purchase, please get in touch with our team of brokers who will be happy to assist you.

Non-farm payrolls and unemployment rates for the US this afternoon could eradicate recent Sterling gains against the US Dollar. Talk to our brokers ahead of the release on 01494 725 353 if you have requirements with US Dollars.


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