Pound US Dollar Exchange Rate (GBP USD) Slips On Positive US Jobs Data

Published: Friday, 10 May 2013 09:00 BST - Written by Toni Johnson

STORY LINK Pound US Dollar Exchange Rate (GBP USD) Slips On Positive US Jobs Data

The US Dollar was star performer in the currency markets yesterday afternoon following the release of a strong set of domestic labour market data. Official US government figures revealed that the number of Initial Jobless Claims had fallen to its lowest level since late in late 2007 last week. The print of 323,000 new claimants bettered analysts’ expectations of a 335,000 showing, suggesting that conditions in America’s real economy are improving. Last Wednesday’s comments from the Federal Reserve’s FOMC ensured that yesterday’s US jobs data strongly benefited the Greenback.

The Fed’s promise that there would be no scaling back of its Quantitative Easing programme until conditions in the American labour market improved initially caused the Buck to weaken. However a combination of a relatively strong April Non-Farm Payrolls figure last Friday and yesterday’s highly positive weekly Initial Jobless Claims data have prompted investors to trim their bets on a continuation of QE from the Fed, causing the US Dollar to be well-bid. By the latter part of yesterday’s North American equities session, the Pound to US Dollar exchange rate (currency : GBP USD) had lost the best part of a percentage point on the day and had traded down to as low as 1.5430.

Looking ahead to today’s session, the major risk event of note comes in the form of the latest Canadian unemployment data. Analysts are expecting the April data to show that the overall level of unemployment in Canada has remained static at 7.2%. If the print shows at anything below this, then the Pound to Canadian Dollar exchange rate (currency : GBP CAD) is likely to slip back below the 1.5500 level which it is currently teetering just above. The GBP AUD, GBP NZD and GBP ZAR exchange rates are also likely to suffer losses in such a scenario thanks to the uptick in global risk appetite which it would engender.

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