020 7898 0500
Economists worldwide turn to the US dollar as a safe haven currency
On Friday, US non-farm payrolls surpassed market expectations of 170,000 in September with a reading of 336,000. This result gave the Federal Reserve enough fuel to keep interest rates higher for longer.
Following this surprisingly upbeat reading, the pound and euro slipped 0.6% against the US dollar but rebounded before the end of Friday’s session.
This morning, the US dollar is up against the euro, pound, Australian dollar, New Zealand Dollar and Swiss franc, however, investors seek refuge as geopolitical tensions escalate on the Israel-Hamas conflict.
As Israel formally declared war on the Palestinian Hamas Group, oil prices jumped 3% and airline shares fell; IAG dropped 5%, Wizz Air fell 7% and easyJet dropped 3.8%.
The Canadian economy recorded a profitable month for labour in September, adding 63,800 jobs, the highest reading in eight months and well above expectations of 20,000.
Last week, KPMG’s latest Global Outlook survey of 1,300 CEOs reported that most (64%) of UK CEOs predict a full return to five days a week of in-office working in the next three years, by 2026.
Industrial production output in Germany fell 0.2% month-over-month in August 2023, compared with forecasts of a 0.1% fall and following a downwardly revised 0.6% drop in July. This marks the fifth decrease of 2023, this month led by weakness in energy production (-6.6%) and construction (-2.4%).
It is rather quiet on the data front, with just a few speeches from Fed policymakers both this afternoon and tomorrow.
Wednesday will bring US PPI news, which is forecast to decrease from 0.2% to 0.5%, and FOMC Minutes, which should shed light on the central bank’s outlook for October.
Later in the week, economists will have lots to digest with UK GDP on Thursday, followed by US inflation figures, US CPI and on Friday, the Michigan consumer sentiment figures.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Business Trader on 020 7898 0500 to get started.
GBP: UK GDP to provide direction
Early on Thursday morning, economists expect the monthly UK GDP figures to show a 0.1% growth rate, following a 0.5% decline in July 2023, the biggest decline so far this year.
GBP/USD: the past year
EUR: A quiet week for data
This week is relatively quiet for the eurozone, however as conflicts in the Middle East continue and investors seek a safe haven in the US dollar, economists will be watching the EUR/USD exchange rate closely.
USD: Non-farm payrolls boost Wall Street stocks
US stocks rallied on Friday afternoon as fresh jobs data boosted key stocks including The Dow Jones, which gained 400 points, The S&P 500 gained 1.4% and the Nasdaq rose 1.7%.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541.
