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April 2016

USD remains strong after positive jobs data

Published: Monday 04 April 2016

  • USD remains strong after positive jobs data
  • GBPEUR stuck around €1.25
  • AUD unchanged on mixed data
Friday was an odd day; very little tier one data other than the US employment and wages reports. The data was to the positive side in general though.  America created 215,000 jobs in March, which was better than expected and average earnings also beat the forecasts; a 2.3% year on year rise than the forecast 2.2%. To add to the party, the ISM Manufacturing Index was up to 51.8 from a poor 49.5 last month. The US Dollar, as you might have expected, had a decent day; gaining on most fronts.
So as those with dodgy tax affairs run through Panama scramble to restructure their money laundering plans, all we in the foreign exchange market know is that this week begins with a little more data than last week. We have already seen Australian retail sales and building approvals data. The retail sales data showed no growth in February but there was a solid rise of 3.1% in building approvals after a shockingly bad 7.5% decline in January. The Aussie Dollar was largely unchanged on the news but traders remain a tad subdued ahead of tomorrow's interest rate decision from the Reserve Bank of Australia. No change is forecast but there are uncertain times and anything could happen.
The Sterling – Euro exchange rate has slipped again as the effects of Brexit and slowing growth weigh on Sterling. The very important 80p level (€1.25 to the Pound) proved to be a big support level through the 2nd half of 2015 and may well be the support level now; although we are slightly below that as I write. This morning brings Eurozone unemployment data and producer prices. Both could be influential on the Euro and so could all the service sector Purchasing Managers’ Indices due tomorrow. Lively trading is guarantees and volatility generally emanates from that.
This afternoon belongs to the US data; factory orders and durable goods orders will dominate. The factory orders data is expected to show a significant decline and that could damage the US Dollar. The Sterling – USD rate is currently at the lower end of its range, so there is plenty of space for a bounce. The Euro - US Dollar rate is similarly placed.
And if you have had your dodgy tax arrangements foiled by the Mossack Fonseca leaks, and you have £20 million or so to spare, you could buy your own village. The whole village of West Heslerton in North Yorkshire is going to auction and the estimate is in that £20 million area. For that you get a mansion, plus 42 houses, a pub and a sports pavilion. The only caveat – apart from the purchase price – is that you must commit to keeping the village way of life. Happy bidding.

Medical terms

The man told his doctor that he wasn't able to do all the things around the house that he used to do. He asked the Doctor to check him over to see what was wrong.
When the Doctor had done a number of tests, the patient said, "Now give it to me straight Doctor. Tell me in plain English what is wrong with me."
"Well, in plain English," the Doctor replied, "you're just plain lazy."
"Okay," said the man. "Now give me the medical term so I can tell my wife."

 Today's Major Economic Releases

Market BST Data/Event Previous Expected
GBP 08:30 UK: Construction PMI, index 54.2 54.1
EUR 09:00 E19: PPI, % m/m (y/y) -1.0 -0.5
EUR 09:00 E19: Unemployment rate, % 10.3 10.3
USD 14:00 US: Factory orders, % m/m 1.4 -1.7

FX Research by David Johnson

Daily Currency Analysis with William Busby

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