Pound Dollar Exchange Rate Forecast Lower, Pound Canadian Dollar Falls Following Jobs Data

Modified: Friday, 7 February 2014 17:48 BST - Written by James Fuller

STORY LINK Pound Dollar Exchange Rate Forecast Lower, Pound Canadian Dollar Falls Following Jobs Data

Not for the first time in recent months, this afternoon’s US labour market data provided a dichotomy; the January Non-Farm Payrolls jobs numbers came out well below expectations for the second month on the trot, while the overall unemployment rate slipped unexpectedly to 6.6%.

The NFP data tends to be the one which grabs the headlines in the global currency markets and subsequent price action for the Dollar certainly suggested that this was the print which caught the eye of currency market participants. The Pound US Dollar exchange rate (GBP/USD) briefly touched the 1.6400 threshold as a consequence.

However, the forward move for Cable is by no means guaranteed to persist. The US Federal Reserve has for some time used the overall employment figure as the benchmark measure which will trigger any tightening of domestic monetary policy. For this reason, today’s surprise drop in US joblessness could well serve to send the GBP USD exchange rate lower when next week’s session in the currency markets gets underway in Asia on Sunday night UK time.

Elsewhere, the Pound Canadian Dollar exchange rate (GBP/CAD) has continued to pull back from its multi-year highs of the end of last month during this afternoon’s session thanks to strong Canadian job creation and overall joblessness figures. 29,400 jobs were generated in Canada’s export-driven economy last month, while the total level of unemployment tumbled to 7.0%. GBP CAD now looks to have left rates in the mid 1.8000s well behind and the next stop heading lower for the pair comes at the psychologically-key 1.7000 level.

Meanwhile, the Pound ended the week on a high following the publication of January’s rolling 3 month Gross Domestic Product estimate from the widely-respected National Institute of Economic and Social Research which moved ahead from December’s showing of 0.7% to 0.8%, providing further evidence that the UK economy is moving toward a period of sustained growth.

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TAGS: American Dollar Forecasts Canadian Dollar Forecasts Currency Predict Forecasts