Disappointing jobs data softens US dollar

Key Movers

US dollar softness helped the euro climb off lows to 1.212 today, while GBPUSD was a touch higher at 1.393.On Thursday, UK monetary policy makers voted to leave interest rates unchanged yesterday, while slightly tapering the asset purchasing program. Yesterday’s news caused GBPUSD to dip by 0.4% for a moment before retracting higher on the improved economic outlook. Bank of England Governor Andrew Bailey revised his GDP growth to 7.25% for 2021, which strengthened the pound. Bailey concluded with “We have not yet completed our review into the sequencing of policy tightening” and insisted that the reduction in gilt purchasing was not a tapering decision. It suggests that we will not see a rate hike in the next meeting, however, are more likely than before Thursday’s meet to see one before the end of 2021. This would be sterling positive.The Australian dollar opened higher this morning, extending toward 0.78 US cents overnight thanks to a broadly weaker US dollar. Having tracked sideways through much of the morning, the AUD fell sharply around midday following reports China’s National Development and Reform Commission had suspended high-level economic dialogue with Australia indefinitely. We expect the AUD will continue to whipsaw between support and resistance, maintaining its narrow handle through the short-term.