(EUR/USD) All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, (EUR/GBP) Bleak Economic Outlook For the UK Sends GBP Spiralling - Good Morning Forex!

Risks in the US Banking System: Potential Impacts and Contagion Concerns

Summary:

  • US forex and stock markets await labour statistics.
  • The UK economic outlook shocks the market.
  • CHF weakens further.

 

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EUR shows slight strengthening against the US Dollar

The price of the EUR/USD currency pair has increased since the market opened this morning. The strengthening of the Euro comes as the market awaits the release of the latest nonfarm payrolls data due from the U.S. Bureau of Labour Statistics, which are expected to have decreased over the past month. If there were any chance of the labour crisis being improved, the Fed may slow on their aggressive monetary policy.

The market sentiment for this currency pair is mixed, investors are awaiting the announcement from the Bureau of Labour Statistics, if the results are favourable, we could see the US Dollar strengthen even more, if the results are below market expectations, we could see the EUR temporarily strengthen further against the US Dollar during the trading day.

All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, Bleak Economic Outlook For the UK Sends GBP Spiralling - 1

EUR/USD Price Chart

GBP weakens against the EUR

Market sentiment is showing bullish signals for this currency pair. On Thursday the Bank of England (BoE) announced their May economic forecast, which reflected a bleak picture. The BoE forecasted inflation to reach around 10% by the end of the year, along with expectations that the UK economy will slow, this forecast made the market turn away from the GBP. In the current economic environment, it is likely that other economies will face the same issues as the UK.

All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, Bleak Economic Outlook For the UK Sends GBP Spiralling - 2

EUR/GBP Price Chart

CHF continues to weaken against the USD

This currency pair is showing bullish market signals for the future. The US Dollar continues to strengthen against the Swiss Franc, the hawkish Fed and dovish SNB are factors driving investors to be net-short.

All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, Bleak Economic Outlook For the UK Sends GBP Spiralling - 3

USD/CHF Price Chart

USD shows strength against the GBP.

The GBP has weakened substantially against the USD in the past 24 hours. The Weakness of the pound sterling is reflective of the fact that the market and the Bank of England (BoE) have differing views of where they believe interest rates are going. Despite the BoE announcing that more interest rate hikes are on the way, markets have still reflected their lack of confidence in the currency. The hawkish Fed continues to drive the US Dollar's strength.

All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, Bleak Economic Outlook For the UK Sends GBP Spiralling - 4

GBP/USD Price Chart


 

Read next: US Dollar (USD) Expected To Strengthen As Investors Await Fed’s Interest Announcement (EUR/USD, AUD/USD), BoE are Expected To Raise Their Interest Rates (EUR/GBP), (AUD/USD) Showing Mixed Market Sentiment Signals, USD/CHF Is Bullish 


 

Sources: finance.yahoo.com, bankofengland.co.uk, dailyfx.com, poundsterlinglive.com

Risks in the US Banking System: Potential Impacts and Contagion Concerns

Rebecca Duthie

Remote Editor and writer Intern
FXMAG.COM

Rebecca has a bachelors degree in Investment Management, a Post Graduate Diploma in Financial Planning and is currently enrolled in a Masters program in International Management with a Specialization in International Finance.