The US Dollar (USD) to Euro (EUR) Exchange Rate weakened to a four-day low after the latest Non Farm Payrolls data came in below economist expectations.
The US Dollar to Pound (GBP) Sterling exchange rate however remained near a one-and-a-half month high.
According to the Washington based Labour Department the US economy create 209,000 jobs in July. The figure disappointed economist expectations for an increase of 233,000.
June’s figure however was revised higher to 298,000 from the previous estimate of 288,000.
The USA’s unemployment rate also increased unexpectedly to 6.2%.
Economists had expected the jobless rate to remain at the previous month’s figure of 6.1%.
As a result, traders scaled back their expectations that the Federal Reserve will raise its raise interest rates by the summer of next year.
‘The expectations going into the report were pretty inflated. The rally in the US Dollar got a little bit ahead of itself,’ said a forex strategist at Credit Agricole.
Taking some of the edge off of the disappointing data was a separate report released by the Institute of Supply Management which reported that the US manufacturing index increased more than forecast.
The ISM manufacturing PMI increased to 57.1 in July, a rise from the June reading of 55.3. Economists had been forecasting for a figure of 56.0.
Any figure above 50 indicates expansion whilst a figure below indicates contraction.
The Pound meanwhile extended a fourth weekly decline against the ‘Greenback’ after domestic retail data released earlier in the session showed that manufacturing output in the UK expanded at its slowest pace in a year.
USD to GBP Exchange Rate Forecast
The US Dollar is likely to maintain its gains against Sterling as a run of weak data releases highlighted a slowdown in the UK economy.
‘With weak data, Sterling will be pressured lower. The firmer US Dollar or disappointing UK data as emerged of late, may keep the Pound on a sluggish tone,’ said Roberto Mialich, a currency strategist at UniCredit.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5936 ,
US Dollar,,Euro,0.7444 ,
US Dollar,,Canadian Dollar,1.0882 ,
US Dollar,,Australian Dollar,1.0724 ,
Pound Sterling,,US Dollar,1.6841 ,
Euro,,US Dollar,1.3434 ,
[/table]
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