Modest job growth?!?

Non-farm payroll data from the US released on Friday, pointed to a slowdown in job growth numbers for the month of April. Jobs rose a meagre 160k against the expected level of 200k, where it has been fairly consistent over the last few months.  

GBP/EUR fails to extend any gain

Although GBP saw a bullish start last week, the British pound to euro conversion rate failed to extend gains towards Friday as poor UK PMIs hampered the UK asset.  Elsewhere, GBP made a feeble attempt to recover as British traders struggled with the PMI releases and the possibility of growth stagnation. With the UK services PMI recorded at 52.1 and Composite figures coming in at 51.9, the pound was left wandering aimlessly.

Reports for the eurozone were also disappointing for Britain as the EUR and GBP both lacked movement.

 EUR remains soft on worrying Eurozone predictions

Following elections in the UK last week, the EUR remained soft on worrying eurozone predictions at the end of last week. Anticipation surrounding the potential Brexit also remains, and while opinion polls are spilt, UK betting markets appear to be heavily favouring the UK to remain in the EU.  For the euro, this would be an important victory as markets would begin to price what varying forms of an EU breakup would look like.

A strong euro would be unwelcome at the European Central Bank (ECB) as it affects the region’s already low inflation and weak economic growth. The European Commission cut its forecast for for eurozone growth this year from 1.7% to 1.6%.

USD strengthens by over 1% against EUR

The USD starts the week in good shape, after strengthening by over 1% against the EUR over the past week. The market saw a cross dipping as important relative rates re-emerged, and as Brexit fears increased, working in favour of the USD. After recording a relatively weak US non-farm payroll (NFP) number on Friday, the USD recovered well, and the most ground against the EUR. The following week will be met with anticipation for investors with speculation as to whether the USD will continue its strong path.

USD to GBP exchange rates saw a series of daily declines over the course of last week as sterling faced renewed pressure from a series of economic releases.

April’s labour-market figure disappointed on payrolls growth, revealing that the US economy had added 160,000 jobs versus the 200,000 increase that was expected by economists. However, wage growth outperformed, with it unexpectedly hitting a three-month high at 2.5% year-on-year.

Tough week for AUD

The AUD currency exchange rates fell last week after the RBA downgraded their inflation forecast in 2016.  However, today’s GBP/AUD forecast confirms the FX markets should see a further trend higher for this pair in the near-term. Following a tough week for the AUD, investors interest in the GBP/AUD exchange rate will note continued strength over the weekend.

Enjoy your week.