20/01/2025
Written by: Ian Morley
Summary:
The US dollar weakened following data indicating ongoing cooling in the US jobs market. Unemployment rose to 4.1%, hourly earnings decreased, and although the nonfarm payroll numbers were higher than anticipated, the previous month’s figures were revised downward from the initial estimate.
In France, the left-wing alliance Nouveau Front Populaire achieved a surprising victory, securing 182 seats and resulting in a hung parliament. Macron’s centrist party followed with 163 seats, while Marine Le Pen’s National Rally secured 143 seats.
Speeches:
Market Insight:
The hung parliament in France has led to a slight weakening of the euro this morning, although the losses have been limited as markets absorb the news. Comparing the stability of UK politics to the uncertainty in France suggests a higher likelihood of gains for GBPEUR, potentially testing recent highs.
This week’s focus is on Fed Chair Powell’s semi-annual testimony to Congress on Tuesday and Wednesday, where markets expect a dovish tone. Thursday brings UK GDP numbers for May, anticipated to show significant growth for the second quarter. Later in the afternoon, US CPI numbers are expected, with a year-on-year decline from 3.3% to 3.1%. Considering Friday’s job numbers, this week’s CPI figures, and Powell’s speech, the USD appears likely to decline further, possibly testing 2024 highs on GBPUSD.