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Economic data mainly drove the US trading session on Friday. US job growth was the main protagonist in most of the incidents in the market’s story as US job growth soared in January amid a persistently resilient labour market, but a further moderation in wage gains could give the Fed grounds for further hikes to fight against inflation.
The US dollar leaped on Friday after data showed that US employers added significantly more jobs in January than economists expected, possibly paving the way ahead before the American central bank to add further interest rate hikes in coming monetary policy meetings.
The GBP/USD pair has fallen this afternoon, as the US Non Farm Payrolls data pointed to a surprise surge of jobs created.
The Euro has managed to climb against the GBP that encounters pressure. This pressure is partly because of the market’s interpretation that the BoE’s language, reflecting that it may be closer to peak policy rates.
The EUR/GBP continues to edge towards 0.90 target. The pair is trading at 0.8963 at the time of writing. Weak productivity, low investment growth, high inflation, recession conditions and a current account deficit are all likely to weigh on GBP in the new year.
Increases in interest rates in 2023 are likely to weigh on the US and European economies, boosting fears of an economic slowdown that is highly likely to impact global crude oil demand.
Economic Data
The NFP printed 517,000 above forecasted 185,000, the data pointed to a red-hot labour market. Wage growth has fallen in January. Investors are concerned that the Fed could continue with tightening in light of the latest NFP reading that quacked Wall Street.
Key Developments
US stocks plunged lower on Friday morning as traders digested the much stronger than expected jobs report for January, but recovered a little bit by midday trading after the US jobs report far exceeded expectations while the unemployment rate fell to a historic low of 3.4%. The Dow was up 21 points, or 0.1%, on Friday afternoon. The S&P 500 fell by 0.4%. The Nasdaq Composite was 0.3% lower.
Brent crude futures dipped $2.48, or 3.2%, to $79.69 per barrel, after rising to the $84.20 high. It touched the $79.72 low, its lowest since January 11. At the same time, WTI crude ended down $2.57, or 3.57%, at $73.37, after trading between $78.00 and $73.13, its lowest since January 5.
Also Read:
WTI Crude Oil Loses Over 3.5% On Robust US Jobs Data
US Dollar Still Soaring Following Huge Jobs Report
USD/CAD climbs on remarkably positive NFP data
Wall Street plunge in reaction to NFP data
