US Dollar

US Dollar Tumbles on Dire US Employment Releases, Euro Lifted by Strong Data Releases

The US Dollar faced broad pressure through this week’s session, as the currency was undermined by lacklustre employment figures, coupled with a prevailing risk-off mood. 

At the same time, the Euro enjoyed some notable support through the first part of this week’s session, on the back of some robust Eurozone data. 

Pound Subdued amidst UK Economic Uncertainty 

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

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

The Pound struggled to attract support this week, as uncertainty over the UK’s economic recovery continued to sap Sterling sentiment.  

This came amidst ongoing concerns over domestic labour shortages and supply chains issues as well as elevated coronavirus cases, all of which could undermine economic activity in the coming months.  

Looking ahead to next week’s session, the focus for GBP investors is likely to be on the UK’s latest GDP release, with the Pound likely to face some headwinds if growth in the three months to July is shown to have slowed, despite the reopening of more of the economy. 

Euro Finds Fleeting Gains amid Soaring Inflation 

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

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

The Euro trended broadly higher through the first part of this week, as the appeal of the single currency was bolstered by some positive Eurozone data releases, including a stronger-than-expected inflation reading.  

However, the Euro then faltered in the latter half of the week, with the reversal in EUR exchange rates being tied to a shock contraction in Eurozone retail sales growth in July. 

Centre stage next week will be the European Central Bank’s (ECB) latest policy meeting. No policy changes are expected from the ECB this month, but the Euro could still be sent higher if the bank signals that discussions about reducing the bank’s bond purchases have begun. 

US Dollar Slips on Disappointing Jobs Data 

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

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

The US Dollar spent the first half of this week on the back foot, as the currency continued to be undermined by Federal Reserve Chair Jerome Powell’s tapering comments the previous session, as well as by a disappointing ADP employment report. 

This downside in the ‘Greenback’ was then extended through the second half of the week after the latest US payroll reading came in well below expectations. 

Turning to next week’s session, the publication of July’s job opening figures could provide the US Dollar with a boost if they continue to point to slack in the US labour market. 

Australian Dollar Bolstered by Upbeat GDP Release 

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

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

After a slow start to the week, the Australian Dollar was able to make some convincing gains in mid-week trade after domestic GDP figures printed above expectations.  

Reinforcing this upside in the ‘Aussie’ was Australia’s latest trade balance, which revealed the country’s trade surplus struck a record high in July. 

The Reserve Bank of Australia’s (RBA) latest interest rate decision will no doubt be the primary focus for AUD investors next week, and could see the ‘Aussie’ strengthen if the bank strikes a hawkish tone with its forward guidance. 

Key Data  

Sep 6 EUR German Factory Orders (Jul)  

Sep 7 AUD RBA Interest Rate Decision 

Sep 7 EUR German ZEW Economic Sentiment Index (Sep)  

Sep 8 AUD Business Confidence (Aug) 

Sep 8 USD JOLTs Job Openings (Jul) 

Sep 9 EUR ECB Interest Rate Decision  

Sep 9 USD Initial Jobless Claims (4/Sep) 

Sep 10 GBP GDP (Jul) 

Sep 10 GBP Industrial Production (Jul) 

Sep 10 GBP Trade Balance (Jul)