A weak US ADP employment figure ahead of today’s non-farm payrolls put dollar under renewed pressure. The print revealed a -79k change against -20k expected. Focus will be no the payrolls and the market is looking for -60k vs. -49k previous.

The euro looks set to consolidate its gains after today’s rate announcement. Traders have fully priced in a 25bp hike but a hawkish statement in the post announcement address should see more EUR strength. Short to medium-term we expect EURUSD to make a push for 1 .60 especially if the above scenarios plays out.

 The pound may be in for further woes this morning. Services PMI is expected to remain in contraction below 50 with expectation at 49.6. The Bank of England will release their Credit conditions survey which is unlikely to make for uplifting reading. Both of the above would normally be sufficient reason to discuss a rate cut (further losses for sterling), but the rising prices and stagflationary conditions we are experiencing will mean this is not an option. However, it will still weigh on the pound.  

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 Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our:Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080.   

Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.