Pound-Dollar Rate Rises As US Jobs Miss Sparks Rising Expectations Of Aggressive Fiscal Stimulus
The US employment data was weaker than expected with the increase in January non-farm payrolls held to 49,000. The data dampened positive sentiment towards the US economy and also fuelled additional pressure for the US Administration to pass additional fiscal stimulus.
Both factors tended to undermine the dollar as it retraced Thursday’s gains and pulled back from 2-month highs.
“James Ingram, investment manager at the fund manager MB Capital, commented: “It would have been nice if the payroll figures taken from January data to kick off the year had defied expectations and started on a positive note but unfortunately the number comes in line with expectations that were already low.”
ING commented; “Today’s report is disappointing, but we are optimistic on the outlook for jobs. February’s report should be better given the California re-opening is underway.”
The bank also warned, however, that a meaningful improvement will need restrictions to be lift in the leisure and travel sectors.
“That is likely to be several months away so vaccine performance and vaccination rates are critical for the outlook.”
