The Dollar has weakened ahead of today’s Federal Reserve policy meeting, with currency markets seemingly taking a glass half-empty view of mixed US macro data. The Dollar barely flinched when a much stronger-than-expected ADP private-sector employment figure of +275,000 for April – the largest job increase since July – was released. But it did sell off following the release of a large (and unexpected) drop in the ISM manufacturing PMI to 52.8 in April from 55.3 in March – the second largest monthly fall since August 2016.
The ongoing slide in the Dollar has helped propel GBP/USD to near 1.31, a notable turnaround for a cross which was trading below 1.29 only three days ago. Sterling, which is trading at a 3-week high versus the Euro, also seems to have benefited from reports of progress in Brexit talks between British Prime Minister May and the leader of the opposition Labour Party Jeremy Corbyn. It should be noted, however, that nothing concrete and/or significant has yet emerged from these ongoing talks to resolve the current Brexit deadlock.
