A green-gilled greenback and a half decent UK jobs report made for a very strong Wednesday for the pound.
Kicking the currency while it was down, US Treasury Secretary Steven Mnuchin claimed at a press conference in Davos that a weaker dollar is good for the country’s economy ‘as it relates to trade and opportunities’. This turned an already bad morning worse for the greenback, with the currency falling 0.4% against the euro, where it’s sunk to a fresh 3 and a bit year nadir, and 0.7% against both the yen and the pound.
Sterling’s gains against the dollar caused cable to flit about the $1.41 mark for the first time since the Brexit referendum result back in June 2016. The pound didn’t stop there, however; it also rose 0.4% against the euro, lifting back to its best price in just shy of 7 weeks. The FTSE wasn’t best pleased with all this, dipping 0.2% as it continued to shed its early 2018 record-breaking momentum.
The pound was aided by a UK jobs report that by and large didn’t ruffle any feathers. Wage growth came in unchanged at 2.5%, and rose to from 2.3% to 2.4% excluding bonuses – in terms of its relation to inflation, though real wages are still being squeezed there are signs that this should ease in the coming months – while unemployment fell by 3000 to 1.44 million (the unemployment rate didn’t actually change, remaining steady at 4.3%).
Turning to this afternoon and following an uneventful, if still record-teasing, session the Dow Jones looks set to pick up speed oh so slightly when the bell rings on Wall Street. Futures have the Dow opening 50 points higher, though that could be dependent on the performance of General Electric (NYSE:GE) and Home Technologies, the latter of which beat its Q4 EPS expectations just before lunch. As for data, the US Markit flash manufacturing and services PMIs are forecast to rise to 55.2 and 54.5 respectively.
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