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Brexit bullishness buoys sterling

USD: By almost any account the US employment figures were strong.  In September unemployment fell to a 3.7%, its lowest level since 1969, and 135k names were added to nonfarm payrolls, taking the total to 149.5m.  Including revisions to earlier months the payrolls number was 36k more than expected. The average monthly increase in 2018 to date is 208k. BUT, investors had been expecting the September increase to be 185k, so they professed disappointment. They were also put out by a slowdown in the pace of wages growth from 2.9% to 2.8% and a widening of the trade deficit to $53.3bn. The USD did not exactly suffer as a result - it is fractionally ahead against the EUR - but the jobs data did not bring out any new buyers.

EUR: Where the USD failed to respond positively to good US economic data, the EUR failed to respond to anything at all. Like the USD, it put in an average performance, in that it was on average unchanged against the other ten most actively-traded currencies. There were no pan-Euroland statistics to help it along: the only relevant ecostats came from Germany, where a 2.0% monthly increase in factory orders  was way ahead of the forecast 0.5% rise and a 0.3% increase in producer prices elicited no more than a shrug.

CAD: The Loonie was not the weakest among the majors but it was in the back half of the field. As with the USD, the CAD failed to gain any advantage from its own set of strong employment data. Unemployment ticked down from 6.0% to 5.9% in September, its lowest rate since, August as 63.3k jobs were created and the participation rate went up to 65.4%. Trade data released at the same time showed exports rising more quickly than imports to produce an unexpected $530m surplus in August. Even so, the CAD lost ground on Friday and slipped further in the Far East this morning. The USD is up by 0.6% on the day.

GBP: The only UK ecostat came from mortgage lender Halifax, whose index showed house prices falling by 1.4% in September. It was an entirely unhelpful statistic but it did not harm whatsoever to the British pound because investors' attention was elsewhere. They got it into their minds, not for the first time, that the UK government might be close to reaching agreement with the EU on a Brexit deal. Whatever that deal might be, it would be better for the UK economy than the no-deal exit that they had feared a week ago. As a result, the GBP wiped the floor with the opposition for a second day. The USD lost 0.2% to the pound.

JPY: On Friday, and in the Far East this morning, the yen was keeping pace with the USD and EUR. Japan is on holiday today so there were no economic statistics to affect it; it just went with the flow. European investors took a different view. They looked at equity prices falling, just about everywhere from Sydney to London, and they decided they needed a safe haven. The USD is down by 0.5% against the yen, with most of that move taking place in London this morning. 

USD ignores good employment data

USD ignores good employment data

EUR steady against the USD

EUR steady against the USD

CAD unmoved by jobs numbers

CAD unmoved by jobs numbers

GBP bags second daily win on Brexit hopes

GBP bags second daily win on Brexit hopes

JPY milks its safe-haven attributes

JPY milks its safe-haven attributes

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