This afternoon, an important gauge of confidence will be released in the US, a major event risk that could be the last chance for the market to change bets on a Fed rate hike. Around the world, negative market sentiment is persisting this morning. Stocks are deeply in the red, benefiting the US dollar.
With less than two weeks left to the Brexit vote, pound volatility has climbed for the sixth straight week, reaching a new seven-year high. Friday sees the sterling headed for its second weekly decline against the dollar. While June 23 is on everyone’s minds, the gauge of volatility looks ahead beyond the referendum, indicating that voting day and its outcome are not likely to signal the end of sharp movements in rates. Overall, accounting for its ups and downs this week, GPB has weakened about 0.5% since Monday.
Canada saw the release of unemployment rate and net change in employment early this morning. Unemployment came in at 6.9%, lower than the expected 7.2% and the previous month’s unemployment. Analysts expect the upbeat figures to increase the appeal of the Canadian loonie and spur a near-term decline in USDCAD as the data indicates an improved outlook for Canadian growth and inflation. The loonie was trading near a one-month high before the release of the May jobs report. Overall, CAD has gained about 8.6% this year, and is the second-best performing Group of 10 currency after the Japanese yen, driven by a rally in oil prices.
EURUSD: Euro declines against USD as sentiment increases prior to US confidence report.
GBPUSD: Pound ends a volatile week with broad weakness against the dollar.
AUDUSD: Aussie dollar down as greenback benefits from falling stocks.
USDCAD: Canadian loonie strengthens against USD after release of positive jobs report.