Pound gains on greenback following softening US jobs data, euro runs hot
Proactive Investors
Published Dec 09, 2022 07:49
Updated Dec 09, 2022 08:11
Pound gains on greenback following softening US jobs data, euro runs hot
Proactive Investors - The US Dollar Index (DXY) continues to weaken on the back of consistent signs of a cooling US economy.
Initial jobless claims have been edging higher since late August (albeit at a fairly slow pace) while forecasts for today’s producer price index expect a reading of 7.3% compared to last month’s 8%.
DXY ended Thursday’s session 0.4% lower and has so far dipped another 0.15% to 104.29 in today’s Asia trading window.
Cable jumped as a result, adding 0.2% on Thursday and another 0.2% this morning to change hands at 1.226.
The pound maintains the upper hand against the greenback – Source: tradingview.com
Sterling has the upper hand in the EUR/GBP pair this morning, though the pair has primarily range traded on 86p for the past four sessions - the current market price of 86.22p is equal to Tuesday’s closing price.
Currently buying 1.057 US dollars, the euro is running hot against the greenback, having added 0.4% yesterday and sustaining the upper hand in the EUR/USD pair this morning.
While the UK and US seem to be weighing up the chances of peak inflation, energy costs in the euro area are a going concern, while unemployment remains at record lows and wage growth is accelerating, hence the persistently hot euro on the forex market.
"The core inflation rate is unlikely to peak until mid-2023 and will only fall slowly thereafter," Commerzbank (ETR:CBKG) economist Christoph Weil recently said. "Against this backdrop, the ECB's goal of pushing the inflation rate back to just under 2% on a sustainable basis seems a long way off."
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