07/05 – US jobs numbers to set the tone for the USD

07/05 – US jobs numbers to set the tone for the USD

GBP: Sterling unable to capitalise on BOE optimism 

EUR: Lagarde speaks at noon

USD: Jobs numbers due at 13.30 BST


The Bank of England did not lend a helping hand to the pound yesterday causing it to rumble lower and wait on fresh impetus to drive it towards the $1.40 level.

This was Bank of England emphasising the cautious in ‘cautious optimistic’, as opposed to optimistic. While the Bank of England is widely expected to want inflation to run above target for several months, there is little sign in the forecasts that it can achieve this on a program of reduced stimulus. The UK economy is getting stronger, but risks remain from both the virus and the effect that a re-emergence could have on the spending and investment landscape that has seen such support in recent weeks.

With votes overnight yet to be counted – we’ll likely get Scottish results over the weekend – sterling may be at the mercy of the USD today.


A speech by ECB President Christine Lagarde remains the focal point for the EUR this morning. We have to think that she is unlikely to touch on tapering expectations ahead of the June meeting of the ECB but instead use her podium to bully politicians into more fiscal spending. This could be enough to push EURUSD towards 1.21 and keep GBPEUR offered.

US dollar

How the dollar reacts to the jobs numbers at 13.30 BST today is almost more important than the number itself. A strong number of over a million jobs would typically see the dollar strengthen as it gives credence to the idea that the US economy is getting closer to full employment and tapering that should accompany it. Given the Federal Reserve refuses to budge on its stance around now not being the time to start talking about reducing stimulus, there is an argument to say that the USD will weaken on a strong number.

Speculative gains away from currencies – in equities and commodities – risk sentiment is strong and global data remains supportive of the environment. Is today going to be the day for a weaker USD?


The news that the Japanese government will extend its state of emergency until the end of May has not yet affected the yen but will likely do so in the event that this continues past June.

Market rates

Today’s interbank rates at 10:58 against sterling. Movement vs yesterday.

Euro€1.152 ↓
US dollar$1.392 ↑
Australian dollar$1.790 ↓
South African randR19.82 ↓
Japanese yen¥151.8 ↓

Have a great day and a wonderful weekend.

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Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.