Currency markets traded within narrow ranges yesterday, as limited US trading activity and a quiet overseas data schedule subdued price movements. Here’s the latest on what’s driving the markets and what to expect.
Sterling on the Defensive as Dollar Edges Higher
Among yesterday’s modest movements:
- Sterling remained under pressure, reflecting ongoing concerns about the UK’s economic outlook.
- The US dollar rose slightly, supported by its status as a safe haven amid a lack of major market catalysts.
US Labour Market Data in Focus
Today, the market spotlight turns to the December US labour market data, which could introduce event risk for the dollar. Recent months have shown signs of a slowing labour market, though the data has been volatile.
Key expectations include:
- Payroll growth: Forecasted at +160k.
- Unemployment rate: Expected to hold steady at 4.2%.
- Average earnings growth: Anticipated at +4.0% year on year.
Stronger-than-expected results could further support the dollar, while softer data may raise questions about the Federal Reserve’s monetary policy trajectory in 2025.
How Could This Impact Your Business?
Narrow trading ranges may provide a brief reprieve, but today’s labour market data has the potential to reignite volatility. Businesses trading in GBP/USD or EUR/USD should prepare for potential price swings as markets digest the US employment figures.
Contact Qumoney’s experts today to discuss strategies for managing currency exposure and seizing market opportunities.