The Pound to US Dollar (GBP/USD) exchange rate fell on Friday after the latest Non-Farm Payrolls data smashed economist forecasts and put more pressure onto the Federal Reserve to raise interest rates.
According to the Non-farm payrolls report published by the Washington based Labour Department, showed that the US economy created 321,000 new jobs in November, smashing economist forecasts for a figure of 225,000. The preceding months figure was also revised higher from 214,000 to 243,000. The USA’s unemployment rate remained unchanged at 5.8% last month, matching expectations.
The data increased pressure on the Federal Reserve to raise interest rates as the report also showed that wages in the nation increased.
‘What a report! The November US employment report blew all expectations out of the water with a gain of 321,000 in nonfarm payrolls. Nearly 100,000 more than the 230,000 expected by consensus and even further from my 207,000 estimate based on other labour market indicators… overall this was a very good employment report. Go ahead FOMC, raise that rate!’ said Mads Koefed, head of macro strategy at Saxo Bank.
Also aiding the US currency was the release of a separate US trade report. The report released by the Washington based Commerce department showed that the nation’s trade deficit narrowed and a rise in exports suggests that the economy is weathering a slowdown in global demand. Tumbling oil prices helped to keep imports lower.
Fed Rate Hike Pressure Supports ‘Greenback’
‘This is likely to not only keep the Fed on track to raise rates around the middle of next year, but could begin to spark talk of a potentially earlier interest rate hike by the Fed and of course, all of this is very positive for the US Dollar,’ said Omer Esiner, chief analyst at Commonwealth Foreign Exchange Inc.
US Dollar Forecast to Strengthen Further
Against the Euro, the US Dollar surged to its best level since 2012 and made strong gains against all of its most traded peers. The fall in oil prices is also expected to have a positive impact upon the US economy.
Pound Sterling to US Dollar Exchange Rates
Pound Sterling to US Dollar exchange rate hit a session high of 1.569
Pound Sterling to US Dollar exchange rate hit a session low of 1.556
