Good morning,

After a thinly traded Thursday, we welcome the US markets back as we head into the weekend, with the US non-farm payrolls taking centre stage today.

An expected rise of 160,000 jobs compared to last months 75,000 will be under close review this afternoon, as markets look for confirmation of the recent bearish gloss over the US dollar. A weaker than expected figure is likely to further support the case for a rate cut this month – particularly following Wednesday’s shortfall in private employment data.

Today will provide substance for the Fed Chairman Jerome Powell’s testimony next week on policy strategy. Any variation on the numbers can influence the Fed’s sentiment, so a bumpy, volatile day for the dollar lies ahead.

The pound remains reactive as the three-month stretch to find a better divorce deal draws ever closer, with UK retailers beginning to consider the effects of Christmas retail numbers already, throwing yet another sour ingredient into the Brexit deal recipe.

The week has seen emerging market currencies continue the drive enjoyed throughout June, with buyers ever on the yield hunt.

The Swedish Krona has seen further demand, with Riksbank keeping interest rates unchanged and holding off from the general monetary policy trend seen in the other major banks. Meanwhile, the Canadian dollar has seen a surprising show on the data front the past month beating expectations – building the case for demand for the currency in Q3.

Have a great weekend.

Author: Ross Hammond