US Dollar

US Dollar Tumbles on Abysmal US Payroll Report, Pound Rallies as UK Fuel Crisis Eases

The US Dollar trended broadly lower this week, with the currency being undermined by an upbeat market mood, coupled with a very disappointing US payroll print. 

At the same time, the Pound has been able to rally this week, as an apparent improvement in the UK’s fuel and energy situation bolstered Sterling sentiment. 

Pound Firms as UK Energy Concerns Ease 

GBP/EUR – Up one cent on the week’s opening levels 

GBP/USD – Up one cent on the week’s opening levels 

The Pound appreciated this week, supported by the apparent easing of the fuel shortage in many parts of the UK and the government’s reassurance that is has enough energy supply for the winter.  

This upside in Sterling was also supported by the UK’s latest services PMI, after September’s index was unexpectedly revised higher. 

Looking ahead, there will be a couple of UK data releases of note next week, with the latest UK jobs report and GDP releases potentially providing fresh trading direction for the Pound. 

Euro Undermined by Europe’s Energy Crisis 

EUR/GBP – Down one pence on the week’s opening levels 

EUR/USD – Unchanged on the week’s opening levels 

The Euro stumbled through the first half of this week, with the single currency being undermined by Europe’s energy crisis, in addition to a weak services PMI reading.  

The EUR selling bias then remained firmly entrenched through the latter half of the week as Germany’s latest industrial data printed well below expectations. 

Turning to next week, the focus for EUR investors in the first half of the session will be on the latest ZEW economic sentiment index, with the Euro likely to face some headwinds if economic morale in the Eurozone dropped again this month. 

US Dollar Slumps as US Payroll Miss 

USD/GBP – Unchanged on the week’s opening levels  

USD/EUR – Unchanged on the week’s opening levels  

The US Dollar initially faltered this week, before quickly finding its feet again as concerns over the US potentially defaulting on its national debt soured market sentiment and bolstered the appeal of the safe-haven ‘Greenback’.  

The US Dollar then closed the week on a sour note after a weaker-than-expected US payroll report raised doubts over the Federal Reserve’s tapering plans. 

Centre stage next week will be the publication of the US consumer price index. September’s CPI figures are forecast to report US inflation rose back to 5.4%, likely bolstering the US Dollar on the expectation this will reinforce the Federal Reserve’s resolve to start tapering its asset purchases. 

Australian Dollar Lifted by RBA Optimism, Upbeat Market Mood 

AUD/GBP – Unchanged on the week’s opening levels 

AUD/USD – Up one cent on the week’s opening levels 

The Australian Dollar strengthened this week, with the currency finding support through the first half of the week on the back of some cautious optimism from the Reserve Bank of Australia, in addition to a record trade surplus.  

After a brief wobble in the mid-week the ‘Aussie’ then resumed its uptrend in response to an improving market risk appetite. 

The publication of Australia’s latest jobs report will no doubt be the focus for AUD investors next week. Will a rise in domestic unemployment in September see the Australian Dollar weaken? 

Key Data  

Oct 12 GBP Unemployment Rate (Aug) 

Oct 12 GBP Wage Growth (Aug)  

Oct 12 EUR ZEW Economic Sentiment (Oct) 

Oct 13 GBP GDP (Aug)  

Oct 13 EUR Inflation Rate (Sep) 

Oct 13 EUR Industrial Production (Aug) 

Oct 13 USD Inflation Rate (Sep) 

Oct 13 USD FOMC Minutes 

Oct 14 AUD Unemployment Rate (Sep) 

Oct 15 USD Retail Sales (Sep)