USD stalls as Fed’s mood is assessed

US jobless claims slowed again last week. 375,000 fresh claims for welfare were filed. That was at the lower end of expectations and the third weekly decline in a row. This, plus the calls for early US monetary tightening, strengthened the USD. GBPUSD dropped ¾ of a cent to just below $1.38 but there has been a little bounce overnight as traders question how committed the Chairman of the US Federal Reserve is to the idea of early ‘tapering’. i.e. is Jerome Powell keen on reducing the Fed’s bond-buying efforts. He has been dovish of late, so maybe not. GBPUSD is back above $1.38 right now but only just. The bounce was very low key, so, with no tier one UK data to speak of, don’t be surprised if this pair falls further through Friday.

Sterling hasn’t gained as you might think it ought to after seeing credit card spending back to within a smidgeon of the pre-pandemic levels. That data followed very solid GDP growth. So where is the Sterling rally?

Well, Sterling hasn’t rallied but neither has it collapsed on profit-taking, which is the other norm in the markets. GBPEUR failed to breach the barricades at EUR 1.18 but it is encamped at €1.1760 and looks highly likely to have another go. As mentioned above, cable, (the GBPUSD rate) is stable and has only declined a little and the Pound is holding station against most other currencies.

Canadian Dollar still gaining after jobs data

The Canadian Dollar has bucked that trend a little. GBPCAD has fallen 1.5 cents since the start of the week after Canada’s stronger than expected employment data. Friday’s release showed an unemployment level of 7.8% after the number of unemployed Canadians dropped by 61,000 and the labour force gained 170,000 employees. Let’s hope that the job trend continues but it will make the Canadian Dollar more expensive for buyers. The GBPCAD rate starts the day just below CAD 1.73.

NZ border closed until 2022 – NZD unmoved

I have to admit to being a little surprised that the New Zealand Dollar isn’t weaker this morning after New Zealand Prime Minister, Jacinda Ardern announced that New Zealand’s borders would remain closed until next year. That has to impact commerce but the potential upside of an earlier end to the pandemic’s negative influence seems to have held sway in the markets. The GBPNZD rate is just above NZD 1.97 this morning.

Friday 13th – be careful out there

And Friday the 13th is living up to the hype for tens of thousands in Japan who are fleeing torrential rains in Western Japan. Floods and landslides are predicted. Please stay safe one and all.

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