IFX Market Report: Monday 10th January 2022

The US Dollar ended last week in red, suffering losses from the release of December Jobs Report. Despite forecasts suggesting the headline Non-Farm Payrolls print would be upwards of 400K, the actual figure came in at a staggeringly poor 199K. This data is particularly harmful for the Greenback in respect to interest rates. During the press conference of the December rate decision Fed Chair Jerome Powell said that the US central bank will wait “for confirmation of full employment in the US economy before making any adjustments to rates”. The US Dollar Index (DXY) also fell on Friday, dropping by 0.269% to 96.001. While Non-Farm Payrolls disappointed, US Unemployment surpassed expectations on Friday. Forecasted at 4.1% with a previous of 4.2%, the actual reading came in at 3.9%.

GBPUSD started Friday just below the 1.3550 handle, opening at 1.3547. Sterling was able to capitalize on a weaker Dollar by the end of the day, closing the week at 1.3570.

GBPEUR in contrast made a loss on Friday as the Euro remained resilient. The pair opened at 1.1976 and closed at 1.1341.

EURUSD was able to gain some upside to finish the week. The pair started Friday at 1.1312 and closed at 1.1341.

The Euro was able to trade aggressively on Friday despite the poor Eurozone Inflation reading. Flash Inflation Rate YoY for December came out at 5%, the highest ever on record. The central bank said last month that it would be cutting its monthly asset purchases but vowed to continue its unprecedented level of stimulus in 2022. Some economist argue that the ECB’s lack of action on inflation may prove to be a hindrance to the Single Currency.

On the data front it’s a quiet schedule. At 10:00 the Eurozone will release Novembers Unemployment Rate, forecasted at 7.2% with a previous of 7.3%. Then at 15:00, from across the pond, the US will release its Wholesale Inventories MoM for November.

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