US job markets shows signs of slowdown
230,000 fresh claims were filed for unemployment welfare payments in the US last week. That was in line with the market forecasts the data has been trending higher since September and that is a worry. The ongoing claims data also shows some of the difficulties being faced in finding new work when Americans have lost their jobs. The stubbornness of this data concerned the markets a little and saw the US dollar weaken on Thursday. The GBPUSD rate is above $1.2250 again and the EURUSD rate is up to $1.0575 this morning. This afternoon’s University of Michigan consumer price survey will be a test of whether that labour market uncertainty is playing into consumer confidence and we will also see the producer price indices, which can foretell pipeline inflation. However, we are due US inflation data and a Federal Reserve interest rate decision next week, so traders are likely to keep their powder dry today. If so, the dollar could have a quiet day at the office.
GBPUSD is up but Sterling is flat elsewhere -BOE next week though
As mentioned above, the GBPUSD rate has risen on nervousness regarding the US employment levels but the pound is fairly flat against other currencies. The GBPEUR rate is quite crab-like in its sideways shuffle around €1.16 and the same can be said of GBPAUD just above AUD 1.8050 and GBPNZD at NZD 1.9150. The outlier is the GBPCAD rate which has tracked the GBPUSD rate higher. That suits at CAD 1.6666 this morning. That devilish-looking rate is just below the resistance we saw earlier in the week. This apparent serenity won’t continue into next week. From the UK we will get economic growth data, consumer price inflation, employment, and earnings numbers and we are very likely to get an interest rate hike from the Bank of England. If that doesn’t stir the pot, I don’t know what will. It is really hard to determine where Sterling will be this time next week because there are so many variables but the volatility within the week should offer opportunities for both buyers and sellers and the use of automated orders to take advantage of sudden spikes and troughs is most likely the best option for everyone.