Greenback at six-week highs ahead of US jobs report – United States – English

Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist

USD extends this week’s comeback

The US dollar extended this week’s recovery on Thursday with the world’s most traded currency boosted by stronger US data and growing geopolitical tensions in the Middle East.

The USD index hit the highest level since mid August overnight helped by a stronger than expected reading from the services PMI number – at 54.9 versus the 51.7 expected.

Most major currencies lost ground versus the greenback with the AUD/USD down 0.5%, NZD/USD down 0.7% and EUR/USD losing 0.2%.

In Asia, the USD/JPY, USD/SGD and USD/CNH were all higher as these markets rebounded from recent lows.

Tonight, all eyes are on the US jobs report, with markets looking 150k new jobs after last month’s disappointing 142k reading. The unemployment rate is expected to stay steady at 4.2%. US jobs are due at 10.30pm AEST.

GBP hit on BoE shift

The British pound tumbled overnight after Bank of England governor Andrew Bailey said the central bank could be “more aggressive” in reducing interest rates if UK inflation falls.

The GBP/USD fell 1.1%.

The pound was weaker in most other markets with the AUD/GBP at two-month highs. NZD/GBP near one-month highs and GBP/SGD at six-week lows.

Looking forward, UK construction PMI will be released at 4.30pm AEST today. According to this poll, construction activity has been increasing over the previous six months and is still growing.

The areas of housing, commerce, and civil engineering development are all seeing an increase, and the number of new orders is rising swiftly.

An improvement in sales pipelines and a reversal in demand circumstances were mentioned in the news release.

In August, the headline index was 53.6, which was comparable to the average for the preceding four months.

While the pound has weakened recently, the bullish trend remains intact for GBP/USD above 1.30 key support.

PHP braces for CPI release

Ahead of Philippines inflation, we’re looking for September headline CPI inflation to drop sharply from 3.3% to 2.4% y-o-y, driven by lower rice prices and strong base effects.

Furthermore, the cost of gasoline and energy has decreased. In addition, we anticipate steady core inflation at 2.7% after recent decreases.

After the recent sharp increase, which we believe was more of a USD catch-up than an outperformance tale, we are neutral on the peso since the fundamentals do not point to further adjustment from this point.

USD/PHP is also below 50 and 100-day key exponential moving averages, which suggests downward momentum.

Greenback higher for fourth straight day

Table: seven-day rolling currency trends and trading ranges  

Key global risk events

Calendar: 30 September – 4 October  

All times AEST

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.