US Data Disappoint

The dollar weakened Friday as data largely disappointed. UK politics are in focus as the Commons returns from recess.

Previous Day's Market Highlights

The dollar saw pressure again Friday as the December jobs report disappointed. The US economy added only 148K jobs to the economy, well under consensus forecasts of 190K. Wage growth ticked up to 0.3% from November to December, in line with forecasts, but earnings overall remained subdued. Additionally, the trade deficit was wider than forecast.
 
These disappointing figures led to a 0.2%-0.3% drop in the dollar against both the pound and the euro. GBP/USD jumped towards 1.3580, whilst EUR/USD tested 1.2080 but again held below the 2017 high of 1.2092 (which was in turn the rate’s highest levels since January 2015).  
 
The Canadian dollar jumped as employment data surprised to the upside. Instead of rising, the Unemployment Rate fell to 5.7%, while Net Employment Change was 78.6K, 77.6K higher than projected. This saw GBP/CAD plummet around 0.9% towards 1.68 to its lowest levels since mid-November. The strong figures likely increased expectations of a January rate hike.
 
Earlier in the day, the euro had a muted reaction to underwhelming CPI data, which saw core inflation hold at 0.9% for the third consecutive month and headline inflation slip to 1.4%.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1289 1.1509 1.1204 2.65%
GBP / USD 1.3538 1.3613 1.3304 2.27%
EUR / USD 1.1993 1.2089 1.1717 3.08%
GBP/AUD 1.7292 1.7846 1.7219 3.51%
GBP / NZD 1.8913 1.9564 1.8878 3.51%
GBP / CAD 1.6806 1.7306 1.6757 3.17%

Today's Market Highlights

The calendar gets off to a quiet start today. A slight tick up in the Eurozone’s Economic Sentiment Indicator (10:00 GMT) could offer the euro some support but typically has limited market impact. Canadian dollar traders will keep an eye on the Bank of Canada’s Business Outlook Survey (15:30 GMT) for any implications for monetary policy.
 
The House of Commons returns from the Christmas recess today. Attention will be on politics with a cabinet reshuffle expected.  
 
Fed speakers this evening include Bostic (17:40 GMT), who will speak on the economic outlook, and Williams and Rosengren (18:35, 21:00 GMT), who will speak at the inflation targeting conference.

Today's Economic Calendar

Time Currency Release Consensus Previous
10:00 EUR Economic Sentiment Indicator (Dec) 114.8 114.6
10:00 EUR Consumer Confidence (Dec) 0.5 0.5
15:30 CAD Bank of Canada Business Outlook Survey
17:40 USD Fed's Bostic Speaks
18:35 USD Fed's Williams Speaks
21:00 USD Fed's Rosengren Speaks