The US dollar strengthened yesterday, still fuelled by the better than expected non-farm payroll figures released on Friday. The greenback was lifted to a 5-week high against the safe-haven yen as the jobs figures for last month showed 304,000 new positions had been created. This exceeded expectations and was the largest gain since February last year. Weak European data has also helped the dollar make progress across the board and further positive news on manufacturing activity in January also boosted the buck. GBPUSD moved below 1.31 and now trades close to 1.30 while EURUSD moved towards 1.14 where it sits currently.

Elsewhere, sterling rose on Monday as a report hinted that goods being shipped to the UK from the EU would be welcomed without checks in the event of a ‘no-deal’ Brexit. The report alleviated concerns over the potential disruption to the UK’s economy following a chaotic exit from the bloc. The government also later revealed that most goods arriving from the European Union would arrive on UK soil without being required to pass through full customs checks for at least three months if a deal is not struck.

Today’s key events

This morning, several PMI releases from Europe came in broadly as expected causing little euro movement. The UK’s offering however was less than impressive, with the Services sector reading arriving below expectations and only just managing to hold above 50 – the threshold between contraction and expansion of a sector. The pound has retreated following the news, trading at 1.14 against the euro at the moment.

Across the pond this afternoon the US will announce its latest ISM non-manufacturing figures, with a slight decline from the previous reading expected.

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