The US dollar is pushing further ahead in early European turnover, buoyed by Friday’s blowout NFP report and US ISM data. The super-sized US Jobs Report – NFPs at 517k, unemployment rate at 3.4% – stunned the market with the magnitude of jobs created despite the beat being influenced by yearly population changes. The ISM non-manufacturing PMI released later on Friday also beat expectations by a wide margin – 55.2 vs 50.4 exp. and 49.2 prior – giving the greenback a further boost. The dollar is now trading at its highest level since mid-January, although the CCI indicator is showing that the greenback is in overbought territory.
US Dollar Index (DXY) – February 6, 2023
There is little cheer for the British Pound of late. Economic data has not been strong enough to underpin Sterling against its rivals, while ongoing strikes, and the threat of more in the coming weeks, are hitting sentiment.
On Friday, the Office for National Statistics (ONS) will release Q4 GDP preliminary data. UK growth is seen stalling in Q4 of last year and may have gone into reverse, powering further recessionary fears. The recent International Monetary Fund (IMF) update suggested that the UK economy will contract by 0.6% this year, nearly one full percentage point below their earlier estimate.
Cable is trying to cling on to the 1.2000 handle today after giving up around four big figures since Thursday’s 1.2402 high print. Recent support around 1.2290 was unable to stem the sell-off and the next level of technical support is seen around 1.1950 from the 200-day moving average. The market does look oversold using the CCI indicator in the short term at least.
GBP/USD Daily Price Chart – February 6, 2023
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