Good morning and welcome to what is commonly known as “Jobs Day”. The first Friday of each month sees the release of non-farm payroll data in the US which is commonly seen as being the most important economic news with the potential to affect the FX markets. It’s not always the smartest or easiest thing to predict which way the figures will go but we are expecting an improvement from last month’s figures which took a hit due to the adverse weather conditions.
There were no huge surprises yesterday as interest rates remained unchanged in both the Eurozone and for a record 5th year at 0.5% in the UK. GBP strengthened on the back of this against the US Dollar but we saw a slide against the Euro dropping by around 1 cent from its highs. The Euro strength was on the back of Mario Draghi taking to the stage after the rate announcement and announcing a higher GDP forecast for the Eurozone in 2014 and proclaiming that risks to the inflation outlook are limited. Draghi also hinted that we were further away from a rate cut than had been speculated upon and also marvelled at how the Eurozone is an “island of stability”.