The US Dollar was able to capitalise on its safe haven status yesterday after global growth concerns pushed the greenback higher.
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Safe haven currencies were the main benefactors of the weak data released from China earlier this week, and this is made very clear by the fact that yesterday only the Japanese Yen managed to gain against the greenback. The recent jump for USD has been prompted by concerns that the Chinese economy is slowing. PMI readings for the Chinese Manufacturing sector showed that this sector has contracted for the first time in 19 months. This comes after data showed a slowdown in factory output from China recently and due to it being the world’s 2nd largest economy the knock-on effects would be felt worldwide.
Such concerns are currently increasing the US Dollars value as investors seek a safe haven currency they trust.
The GBP/USD rate is within 2 cents of its annual high for US Dollar sellers at the moment, and this is worth being aware of.
One of the main talking points of 2018 is the trade war between the US and China, and I expect it to continue to drive not just the US Dollar's value but also currencies that are tied into the US Dollar.
Just yesterday a US delegation flew out to China to discuss the trade talks after an apparently positive conversation between US President Trump and China’s President Xi over the weekend. I would expect any updates regarding this meeting to impact the US Dollar's value.
It will be the first Friday of the month this week and therefore the release of US non-farm payrolls and unemployment data will be released at 1.30pm. It’s one the most exciting times for the financial markets as the data is followed closely and there can be some major market movements depending on the release. The unemployment rate is expected to show 3.7% and the amount of new jobs created (outside of the agricultural sector) is expected to show 177k new jobs. If you wish to be updated do feel free to register your interest with us prior to Friday lunchtime.
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