Sterling was supported by on-going expectations of a Conservative election victory with GBP/USD at fresh 7-month highs.
The headline US job report was much stronger than expected with an increase of 266,000 in November non-farm payrolls. The data boosted confidence in the US outlook.
A much weaker than expected jobs report hurt the Canadian dollar.
Hopes for global stabilisation helped underpin equity markets, but with caution over US-China trade talks limiting potential gains.
The dollar made net gains after the jobs data, although European currencies demonstrated some resilience.
The Euro failed to make headway ahead of Friday’s New York open and EUR/USD drifted lower after failing to hold the 1.1100 level.
US non-farm payrolls increased 266,000 for November, well above consensus forecasts of 180,000 and the October figure was revised significantly higher to 156,000 from the 128,000 reported originally. There was a significant impact from the return of striking auto workers which added over 40,000 manufacturing jobs with solid overall gains.
Sterling was supported by on-going expectations of a Conservative election victory with GBP/USD at fresh 7-month highs.
The latest election opinion poll released on Friday recorded a 12-point lead for the Conservative Party and expectations that Prime Minister Johnson would win a majority provided underlying currency support. An element of optimism over the global economy also provided some net Sterling backing amid hopes that trade volumes were stabilising.
Sterling retreated against the stronger dollar, but GBP/USD found support close to 1.3100 and posted fresh trade-weighted gains.
CFTC data recorded a decline in short Sterling positions to near 6-month lows, although there will still be scope for a position squeeze and short covering if sentiment remains stronger. Weekend opinion polls suggested that the Conservative poll lead had stabilised and possibly widened slightly which underpinned currency sentiment. GBP/USD advanced to fresh 7-month highs near 1.3170 while GBP/EUR dipped to fresh 30-month highs near 1.1900.
Economic Calendar
| Expected | Previous | ||
|---|---|---|---|
| 06:45 | CHF Unemployment Rate n.s.a.(NOV) | - | 2.20% |
| 06:45 | CHF Unemployment Rate s.a.(NOV) | 2.30% | 2.30% |
| 07:00 | German Trade Balance(OCT) | 19.0B | 19.2B |
| 09:30 | Euro-Zone Sentix Investor Confidence(DEC) | - | -4.5 |
| 13:15 | CAD Housing Starts(NOV) | 221.2K | 202.0K |
| 13:30 | CAD Building Permits (M/M)(OCT) | -2.00% | -6.50% |