Fed Chair Powell’s rhetoric-maintained market expectations of a 0.25% rate cut this month.

US employment data was mixed with a miss on the headline’s payrolls data offset by firm wages growth and strong household survey.

Fed Chair Powell’s rhetoric-maintained market expectations of a 0.25% rate cut this month. The US dollar was little changed overall as EUR/USD failed to hold gains while demand for defensive currencies faded slightly

Strong employment data boosted the Canadian dollar with net gains for commodity currencies. Expectations of global central bank support underpinned global risk appetite with modest gains for equity markets.

Precious metals maintained a softer tone as weaker defensive demand triggered a dip in long positions.

Saudi Arabian commitment to production cuts helped secure net gains for oil prices in choppy trading.

US non-farm payrolls increased 130,000 for August, below market expectations of 160,000 and the July increase was revised down slightly to 159,000 from 164,000. The increase in private-sector jobs was held at 96,000 with only a slight increase in manufacturing while retail employment declined again while government jobs increased significantly.

Sterling continued to gain some support from an improved tone in global risk appetite during Friday. UK inflation expectations also edged higher for August which will tend to deter Bank of England monetary easing.

Political developments remained important with legislation blocking a ‘no-deal’ Brexit at the end of October approved in parliament and set to be made law on Monday. UK opposition parties reiterated that they would again block government calls for a General Election in Monday’s House of Commons vote. The UK currency drifted lower with a correction from sharp gains in mid-week amid major uncertainty. GBP/USD settled below 1.2300 with GBP/EUR around 1.1115.

Over the weekend, Cabinet member Rudd resigned from the government, further increasing tensions and the government stated that it would seek to push the law to the limit to avoid having to ask for a further Brexit extension. There will be further volatility with parliament likely to be suspended from late on Monday and GBP/USD drifted towards 1.2260.

Economic Calendar