Losses Forecast For GBP/USD Exchange Rate If NFP Data Pleases

March 7, 2014 - Written by David Woodsmith

STORY LINK Losses Forecast For GBP/USD Exchange Rate If NFP Data Pleases

The major risk event during this afternoon’s trading session comes in the form of the latest US labour market data. Analysts are anticipating that the closely-monitored US Non Farm Payrolls number will show that some 150,000 new jobs had been created in the vast American economy last month. Anything above this showing is likely to allow the Dollar to firm against Sterling, sending the Pound Dollar exchange rate sharply lower following its recent gains GBP/USD. However, the major element of the US jobs figures may prove to be the overall unemployment figure; this is the element of the data which the US Federal Reserve has consistently name-checked in its policy-setting missives, so a print of below the anticipated 6.6% would be likely to have a marked effect on investors’ expectations regarding the Fed’s plans for its controversial Quantitative Easing policy.

Elsewhere, the Swiss Franc came in for some support during early trading today following the publication of a raft of data from the central European state. The net effect saw the Pound Swiss Franc exchange rate tumble to as low as 1.4674 during early trading today GBP/CHF.

Unemployment figures for last month from the Alpine nation showed pretty much as per expectations, revealing that the overall level of domestic joblessness remained at an ultra-low 3.5%. Economists normally view overall unemployment rates of below 3.0% as an impossibility because of residual unemployment, so the Swiss figure for February is almost as good as it gets for a labour market.

However, inflation numbers from Switzerland, published shortly after the jobs figures, were a little less encouraging, printing at a below expectations annualised -0.1%. The spectre of deflation, a damaging phenomenon whereby not enough money chases too many goods in an economy, could force the Swiss National Bank’s hand in further loosening its monetary policy. For this reason, the Pound’s gains on the day against the Swiss unit are by no means guaranteed to prevail into next week.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Daily Currency Updates Dollar Po Forecasts