Pound US Dollar Exchange Rate Wobbles following US Jobs Data
The Pound US Dollar (GBP/USD) exchange rate wavered today amid a shifting market mood and lower-than-forecast US employment data.
At the time of writing the GBP/USD exchange rate is trading at around $1.2596, virtually unchanged from this morning’s opening rate.
US Dollar (USD) Volatile amid Mixed Data
The US Dollar (USD) fluctuated today following weaker than expected ADP employment change data. The report significantly missed forecasts of 130,000, with private businesses hiring only 103,000 new jobs in November, leaving USD on the defensive.
Looking ahead, USD may see further choppy trade with the release of fresh jobs data. On Thursday the latest initial jobless claims for the week ending 2 December are due out. A forecast rise to 225,000 may see USD falter amid signs of loosening US labour market. Continuing jobless claims are also due to increase, potentially reinforcing concerns about the health of the US employment sector.
On Friday, the highly impactful US nonfarm payrolls are due out. Economists forecast that the US economy will have added 180,000 in November, up from last month’s 150,000. This may serve to abate concerns of contracting US employment should the data report a significant rise in employment opportunity. However, should the data print lower than expected, USD investors may be tempted to replace their bets amid signs of economic weakness.
In the meantime, a spell of cheery trade may continue to stifle the safe-haven US Dollar, leaving the ‘Greenback’ rangebound.
Pound (GBP) Stumbles following BoE speech.
The Pound (GBP) firmed against its safer peers today following a tepid commentary from Bank of England (BoE) Governor Andrew Bailey.
While Bailey offered a mostly optimistic outlook, he affirmed the challenges that the UK faces on the road to economic recovery.
Looking ahead, a continued lack of economic data through the remainder of the week may temper any significant movement in the Pound. While economic reports are in short supply, investors will likely remain reluctant to place any aggressive bets on GBP, amid a souring Sterling sentiment.
As such, the Pound may be left vulnerable to any shifts in risk appetite. Amid global inflationary pressures and developing conflict in the Middle East, market uncertainty may impact the increasingly risk-sensitive Pound. Should trading conditions become gloomy, GBP may slump against the safe-haven USD. Alternatively, an increasing appetite for risk may underpin GBP in the coming days.