The US dollar stabilized while the British pound slid after disappointing jobs data from the UK. The pound was down about 0.5% in late morning European trading. The dollar’s performance against emerging market currencies was mixed.
The Mexican peso, which hit new highs for the year yesterday, is now consolidating. The Brazilian real also reached its best level of the year. Today’s US economic calendar is light.
The market’s focus is shifting to tomorrow’s Consumer Price Index (CPI) report and the ongoing US-China trade talks in London. The talks are expected to address key issues like US tariffs and export regulations.
Us dollar resilient amid UK slump
The NFIB Small Business Optimism Index rose by three points in May to 98.8, slightly above the 51-year average of 98. Despite this positive outlook, UK companies are reportedly holding back on hiring or not replacing departing workers. This has led to a decline in job vacancies.
European Central Bank (ECB) Governing Council member Olli Rehn noted that euro area inflation might undershoot the ECB’s target in the near term. Although US inflation has been declining this year, there are substantial upside risks to the CPI in the upcoming months. This is due to base effects and PMI survey results.
In summary, while the US dollar holds steady, the UK faces challenges with its labor market. This is influencing the performance of the sterling. Financial markets will continue to monitor upcoming economic data and international trade discussions for further direction.
