Yesterday’ roller-coaster in currencies extended today. The Euro, which had weakened sharply following yesterday’s ECB policy meeting, has today more than made up for these losses with the EUR/USD cross up to 1.124. Conversely, Sterling has continued to slide as markets face the prospects of another crucial parliamentary vote on the draft Brexit deal on 12th March. GBP/USD is trading around 1.303 – a level last seen on 22ndFebruary.
The Dollar is broadly unchanged in trade-weighted terms, despite the US economy having only created 20,000 jobs in February – the weakest print since May 2016 and considerably lower than the consensus forecast of 181,000. However, the January number was revised upwards slightly to 311,000 from 304,000, the unemployment rate fell to 3.8% from 4.0% and the hourly wage growth inched up to a respectable 3.4% yoy.
The US labour market remains solid and there was also good news in the housing market, with housing permits hitting a 9-month high of 1.345 million in January and housing starts jumping 18.6% and more than reversing the 14% mom contraction recorded in December. Ultimately markets have taken today’s US data releases in their stride.
