Today is the big event for US economic releases, the Non payroll figures. This update provides job growth data outside of the agriculture sector, this particular release can cause the most volatility for the currency. In the event you would have purchased USD with GBP at the strongest point vs the weakest point during the last 24 hours, you would have been $1,592 better off.
Now that Donald Trump has been confirmed as the Republican candidate in the final race to win the title as the next US President, he is now focussing his attention on how he would run the economy. He announced that he would replace Fed Chairlady Janet Yellen when her current term expires, only for the reason that she is not a Republican.
Although Trump is a controversial character, the Dollar has strengthened since the announcement of his success and I feel this is because some of the uncertainty surrounding the elections has been removed.
An election can cause extreme volatility in the currency markets, and now that we have a clearer picture of who will be in the final race, this seems to have eased minds of investors a little.
Although it was reported yesterday that there was an increase in Initial Jobless Claims compared to last week, claims have remained at almost historically low levels, providing confidence in a strengthening US job market after Jobless claims hit a four year low last month. Following from this positive data, USD strengthened against both Sterling and Euro throughout yesterday’s trading session.
This Afternoon could be particularly volatile for USD exchange rates as Non-Farm Payrolls for April are released at 12.30pm. This provides information on the number of new jobs created outside of the Agricultural sector last month, and I would expect this data to come out better than expected in line with positive jobless claims data yesterday. If this is the case, we could see USD strengthen further, however this figure is very difficult to predict and the event historically causes volatility within the market. With this in mind, it may be wise to contact your Account Manager here at currencies.co.uk to help you to time any transfers you may have this week.
The early part of next week is relatively light for US data releases, until Thursday when Initial Jobless Claims, Import and Export Price Index figures all released at 12.30pm. The most influential release next week is likely to be Retail Sales figures on Friday which will provide an insight into Consumer confidence in the US, and if this is positive we could see the Dollar strengthen further.
Wed strongly suggest getting in touch with one of our currency brokers ahead of the non payroll figures in the event you have USD buying requirements. Call our trading floor on 01494 725 353 or email me here prior to the 12:30 release.
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