Forex Weekly Round Up 6 April 2015 – 10 April 2015

The highlight of the Easter weekend for the US Dollar was the release of the non-farm payrolls on Friday, coming in at a disappointing 126k against a consensus of 245k – the lowest we’ve seen since October 2014. The initial reaction caused a vast sell off of the Dollar, however, a lot of retracement was seen as we headed closer to the opening of the European sessions.

The Dollar strengthened significantly against its major counterparts on Thursday afternoon after the best unemployment figure from the US in 15 years boosted speculation the interest hike may happen sooner rather than later.

Activity in the UK’s services sector surged in March to its highest level in seven months. Reports also showed businesses in the sector are more optimistic about their long-term outlook. It added uncertainty about the outcome of the general election has caused some jitters amongst UK firms.

The UK’s benchmark interest rate stayed at the record low of 0.5%, where it has stayed since March 2009. The central bank also held the size of its bond purchases under the quantitative easing program at £375 billion ($554 billion). This month’s decision came ahead of a general election in May that is expected to be the closest-fought in a generation.

Our analysis of the markets in the next three months is further weakness in the euro and strengthening of the dollar. Weakness in the Euro is good for those who are buying euros and dollar strength is better for those who are selling dollars. The currency markets are liquid and volatile, however, so we may see movements outside this pattern.

Those looking to buy Dollars and sell Euros should consider a Forward Contract to hedge against adverse movements in the long term. Please contact us for your free, no obligation FX analysis.