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Fri 19 Jul 2024 13:07GMT

US Dollar (USD) Rises as US Employment Data Improves in May

Published: 5 Jun at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Canadian Dollar, USA, Canada, China, Germany,

Pound (GBP)

The Pound (GBP) suffered today following Thursday evening’s release of the UK GfK Consumer Confidence report, which fell to 10-year lows at -36.

Joe Staton, GfK's client strategy director, commented on the report:

‘Against a backdrop of falling house prices, soaring jobless claims, and with no sign of a rapid V-shaped bounce-back on the cards, consumers remain pessimistic about the state of their finances and the wider economic picture for the year to come.’

Today also saw the release of the UK’s Halifax House Prices figure for May, which fell to a worse-than-expected 2.6% on the year.

Amid concerns over the UK’s economic strength going to the second quarter were concerns over Brexit.

As a result, Sterling suffered as Britain’s economic outlook looks bleak, with growing fears that Downing Street will not request an extension of the Brexit transition period beyond 31st December.

Euro (EUR)

The Euro (EUR) continued to struggle from worse-than-expected economic data on Friday, with Germany’s Factory Orders falling to -25.8%. Germany’s factory orders, like much else in the Eurozone, was victim of drying global demand.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, commented:

‘It makes little sense to dwell on the horror show of these data, except to note that they’re almost surely the bottom, at least in terms of the sequential monthly numbers.’

However, the Euro (EUR) did find some support from Thursday’s announcement from the European Central Bank (ECB) that it would extend its stimulus package to €600 billion.

Consequently, single currency investors are becoming more optimistic that the bloc could stage a better-than-expected economic recovery.

US Dollar (USD)

The US Dollar (USD) continued to suffer from a sell-off of safe-haven currencies this week, with investors seeking out riskier assets as the global economic situation improves.

Today also saw US unemployment data for May unexpectedly fall to 13.3%. Over 2.5 million jobs were added to the US economy last month.

US President Donald Trump called the jobs report an ‘affirmation of all the work we’ve been doing’ over the course of the Trump Administration. As a result, investors are becoming hopeful that the American economy could be improving.

Canadian Dollar (CAD)

The oil-sensitive Canadian Dollar (CAD) edged higher today after OPEC+ plans to extend its production cuts. Meanwhile, oil demand is also quickly returning in China, one of Canada’s largest importers of oil.

As of Friday, 5th June 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1217, GBP USD exchange rate was 1.2666, GBP CAD exchange rate was 1.6999, and GBP CNY exchange rate was 8.9697.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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