Wednesday proved another solid day for the mighty greenback which racked up impressive gains against both the euro and pound. Sterling broke through the $1.24 handle and edged ever closer to the $1.23 figure while EURUSD plunged into the $1.07s. Meanwhile, GBPEUR saw a day of range trading within the €1.14 handle.
Yesterday’s US ADP non-farm report revealed just over 20,230,000 Americans lost their jobs in the private sector last month. Even though the data was even worse than forecast the buck managed to maintain its composure and even make advances against its peers. Although the domestic situation is dire, the greenback is exerting its status as the safe-haven currency of choice at present. It’s essentially – the best of a bad bunch. As a result, it would not be a surprise to see a little more strength from the US dollar as the true extent of the global impact of the virus becomes visible through economic data.
Earlier this morning, the Bank of England held interest rates steady at 0.10%. The meeting minutes and inflation report will follow later today which should reveal new insights into the Bank’s current thinking.
The next 24 hours will offer some key data releases. US initial jobless claims will be the highlight of today’s session, backed up by various regional eurozone releases across the morning session. Tomorrow will see the most important US non-farm payrolls report ever which arrives while the UK has a bank holiday. As a result, should you wish to take advantage of the price volatility please liaise with your Cornhill FX dealer who will be able to place live market orders which remain in place over the release at 13.30 tomorrow lunchtime.
Have a great long weekend.
Written by Viv Savani. 8:23am, May 7th 2020
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