The US Dollar is trading strong this morning after a better-than-expected labour report on Friday. The all-important Non-Farm Payroll figure for July was forecasted at 870K but smashed expectations by coming in at 943K – the highest it has been in 11 months. The US Unemployment Rate also beat expectations by coming in at 5.4%, marking it biggest one-month decline since October last year. It was an impressive day for the US all round; Average Hourly Earning MoM, YoY, Average Weekly Hours, Participation Rate, Wholesale Inventories, and Consumer Credit Change, all came out better than forecasted. Following these impressive releases, notions of the FOMC easing policy sooner than previously anticipated circulated the market, causing Treasuries to sell-off and enabling the Greenback to rally. Cable closed below 1.39 handle as a result, and EURUSD closed below 1.18.
While England has been enjoying life without COVID-19 restrictions for some time now, Scotland also ended its restrictions at midnight last night. As Scotland’s ‘Level Zero’ ended, the legal requirement for physical distancing has stopped in most places and hospitality venues are now allowed to open at full capacity. Scottish Health Secretary Humza Yousaf has urged “the virus is still with us” and was reluctant to use the term ‘Freedom Day’ due this very fact. Nevertheless, with Scotland now ‘open’, hopes of a British economic rebound are boosted somewhat.
GBPUSD fell below 1.39 on Friday and has been unable to reclaim that position. Cable opened at 1.3919 on the day and closed the week at 1.3866.
GBPEUR in contrast was able to make gains on Friday, enjoying a brief spell in the 1.18 range. The pair started Friday at 1.1772 and closed the session at 1.1791.
EURUSD suffered the same fate as Cable on Friday as a stronger Dollar proved too much for the Euro. The pair opened at 1.1824 and closed the week at 1.1760.