Non farm payrolls sends USD lower

9 April, 2018

Robin Haynes

interest rate riseFriday’s main economic data came in the form of non-farm payrolls in the USA, the main monthly labour market measure taking into account seasonal adjustments for agriculture. Markets expected the American economy to have created 193,000 jobs in March, so the announcement of only 103,000, sent the US Dollar lower on foreign exchange markets – improving exchange rates for those of you looking to send money to the USA or elsewhere in USD.

On top of Thursday’s worsening US trade deficit, and President Trump’s war of words on trade tariffs, the US Dollar has stayed near its cheapest levels since 2016. Friday’s non-farm payrolls sent the rate for GBP to USD up by nearly a cent, meaning the cost of $100,000 fell by around £500.

Euro buyers beware

Rates for those of you buying Euros have been unusually stable for the last 3 weeks, poised ready for the next Brexit developments or major economic data. If you are waiting for rates to improve further, it could be a dangerous game to play, as we have not seen the Pound significantly higher against the Euro since the General Election, and with trade talks and the Northern Ireland issues still to be resolved, any stalling in progress could easily devalue sterling significantly, and quickly. We are currently seeing Euros over 6% cheaper than last summer’s nadir, making a €200,000 property purchase over £11,000 cheaper than 8 months ago, so improvements for the Pound due to the progress of negotiations, have largely been felt already. Many of our clients are currently considering forward contracts, to lock into today’s exchange rates for a period of up to 2 years ahead, to ensure they aren’t caught out.

Economic data this week

This week sees a full economic calendar to keep us busy watching exchange rates for you. In the UK we have house prices, a GDP estimate from the NIESR, trade balance and industrial/manufacturing production, all of which could move the Pound, and in Europe, German inflation & trade balance, and Eurozone industrial production, will all have an influence on the Euro. After last week’s poor US figures, their own inflation number on Wednesday is one to watch.

Monday 9th
0645 Swiss unemployment
0700 German trade balance
0830 UK house prices
1530 Canadian business outlook

Tuesday 10th
1330 US producer inflation
1400 UK GDP estimate

Wednesday 11th
0445 Reserve Bank of Australia Governor speech
0930 UK industrial & manufacturing production
0930 UK trade balance
1330 US consumer inflation

Thursday 12th
1000 Eurozone industrial production
1330 US import & export price indices

Friday 13th
0700 German consumer inflation
1000 Eurozone trade balance

If you have an upcoming currency requirement and have not yet registered with Currency Index, do so now free of charge, and we will help you understand which way exchange rates are moving, when and why – and could save you a small fortune in the process.