On Friday markets saw the US Dollar decline after a strong week of advances. Despite impressive economic data from the US, the US Dollar Index (DXY) dropped from monthly highs back under 92.50. The all-important Non-Farm Payrolls smashed expectations by over 150K, coming in at 850K. This was warmly welcomed by US bulls as figures show the best month of job creation since August 2020. The Greenback initially made upside moves as this data was released but then changed direction. Many economists believe that “profit taking and probably a “buy the rumour, sell the fact” behaviour triggered the decline”. Looking ahead to this week, the latest FOMC minutes on Wednesday will most likely be the key event in the US.
Cable was able to make a sharp recovery from its lowest levels since mid-April on Friday and finish the week strong. Sterling may see some price action this week as Boris Johnson is expected to announce the next steps of easing lockdown restrictions in England. Mr Johnson said he intends to “set out how we can restore people’s freedoms when we reach step four”. The PM cautiously added that he “must stress that the pandemic is not over and that cases will continue to rise over the coming weeks”.
At the end of a tough week for Sterling, GBPUSD opened on Friday at 1.3765 and continued to improve as the session progressed. Cable finally closed at 1.3782.
GBPEUR also made subtle gains on Friday. The pair started the day at 1.1624 and closed at 1.1637.
Despite experiencing some volatility in the session, EURUSD closed not far from where it opened. The pair opened Friday at 1.1841 and closed at 1.1843.
