Market update from Western Union Business Solutions
Pound hammered by EU currencies.
Since May 01 GBP/EUR has fallen almost 5% to a 3-month low. The UK is facing Friday’s UK election result where markets will look for signs of either a straightforward result or days of political uncertainty. The pound has fallen by a similar margin this month against several EU currencies such as the SEK and CHF.
GBP/NOK has fallen around 1.75% this morning after Norway’s interest rate decision wrong-footed markets. The bank held rates at 1.25%. Markets had priced in a cut to 1%, expecting Norway to do more to support its economy.
The Euro has gained by almost 8% since mid-April against the US dollar, reaching over 2-month highs before high-impact event risks over the coming days. Boosting the Euro has been a strong rally in oil prices and positive Euro Zone data leading to bets against deflation problems deepening across Europe.
Key dates in the diary next week will be May 11 when Euro Area leaders and the ECB asses the Greek debt crisis before May 12 when Greece must start making bigger and more substantial payments to its lenders without the help of a new bailout.
This Friday’s US non-farm payrolls data at 13:30 is expected to be a major trading point for a vulnerable US dollar. Yesterday’s poor US ADP jobs report suggests tomorrow’s more influential payrolls number could miss expectations and hurt the US dollar. However forecasts are for payrolls, or US jobs growth, to rise from 126k in March to 224k in April.