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Currency Market Analysis

Nov 05, 2018 | Currency Market Analysis

Global Themes

USD rebounds after bumper US jobs report

The US dollar’s brief flirtation with one-month lows turned quickly higher on Friday after a monster result from the US jobs market supercharged the US dollar.

US non-farm payrolls came in on Friday night with 250k new jobs reported – well above the expected reading of 195k.

After last week’s very strong reading for US wage costs, the jobs report signalled the US Fed is likely to continue to raise interest rates and provide support for the US dollar.

Gains evaporate

With the US dollar so strong on Friday, most currencies weakened.

The euro fell after a bad week with economic growth and inflation both missing expectations. The EURSGD fell to two-month lows.

The Japanese yen remained weak, however, as the better trade news caused investors to move away from safe haven. The JPY fell to levels near 2018 lows.

The GBP started the new week strongly as hopes on a Brexit deal grew.

US elections

This week, the US mid-term elections are held on Tuesday night, with markets expecting a strong performance from the Democrats.

However, a better showing from President Donald Trump’s Republicans could boost the US dollar.

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