Expected Range 1.2980 – 1.3090
Focus on Friday was centred firmly on the US payroll figures which came in positively with Non-Farm Employment change coming in well above forecast at 209K. Markets reacted accordingly with the USD rallying against the majority of currencies. Although the figures showed a relative tightening of the US employment market there is still concern surrounding wage growth. If we begin to see wages move in the right direction markets will certainly be more susceptible to pricing in a more hawkish Fed for the back end of 2017. News emerged on Friday that the Trump administration will attempt to push through tax reforms in early autumn. The administration has struggled to put through any major reforms to key legislation most notably the healthcare bill which has seemingly been tabled for the time being. Political uncertainty remains high from the US which will likely hold back any major rally by the currency and further failures on the legislative front will likely weigh on the greenback. With very little data of note to be released today markets will continue to be motivated by Friday’s releases.
Sterling remained fragile towards the end of last week’s session following Thursdays Bank of England announcement. With risks to growth remaining high the central bank drew back on their hawkish rhetoric, causing the currency to retreat against the majority of currencies. The pound struggled further on Friday with the release of US payroll figures as cable fell from 1.3256 to 1.3028 within 48 hours. Only minor releases scheduled for today with Halifax HPI m/m forecast to rise from -1.0% to 0.3% but will unlikely move markets. GBP/USD is currently trading at 1.3055.
Expected Range 1.1000 – 1.1120
For the first time in a number of weeks, the Euro retreated on Friday as the currency came under pressure following US payroll releases. We have limited data to be released during the early session of this week with German Industrial Production m/m falling further than expected to -1.1%. The currency will need solid releases this week in order to reverse the losses seen on Friday. GBP/EUR is currently trading at 1.1054.
Expected Range 1.6410 – 1.6520
The Australian Dollar retreated slightly on Friday following US payroll figures, however, compared to the majority of currencies the AUD remained relatively steady. With little data of note to be released focus for the Australian Dollar, alongside the other commodity currencies, will turn to the OPEC meeting scheduled for today where members will discuss current production limitations. Any news or announcements here could potentially motivate oil prices and associated currencies. GBP/AUD is currently trading at 1.6467.
New Zealand Dollar
Expected Range 1.7650 – 1.7750
From New Zealand, Inflation expectations q/q were revised down from 2.2% to 2.1%, weighing on the currency. With little else on the cards from New Zealand markets will now turn to wider factors for guidance. GBP/NZD is currently trading at 1.7696.