FX News

FX Update: Risk back on

Market Overview

• UK and Japan holiday’s Monday saw a slow start to the trading week.
• US jobs report published Friday came in softer than markets were expecting with march figures confirming only 175,000 jobs were added in April compared to 300,000 expected. This has created speculation of a “late summer” interest rate cut as fears of an overheating economy are now off the table. The Unemployment rate jumped from 3.8% to 3.9% as a deterioration of hiring conditions worsens.
• US Stocks rose sharply Friday post the Fed jobs report as investors cashed in on yield differentials.
• ECB unemployment remained at a record low for the fifth straight month as the economy continues to improve, this won’t change the predicted rate cut to be scheduled in June, but it may change what happens afterwards.
• Upside inflation forecasts and wage growth have the RBA considering another rate hike could be required.
• The Australian Dollar (AUD) is the strongest currency this week while the weakest currency has been the Japanese Yen (JPY).

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