The U.S. Dollar gained about 1.0% across the board after a week characterized by its slew of data that helped define a divergence in economic performance between the America and Europe.
Everything from PMIs to Retail Sales, as well as inflation and other figures showed major differences in expansion. Currently, the greenback is staying strong in the midst of mixed statistics in the Employment Situation.
Change in Non-Farm Payrolls revealed less growth than expected at 164K instead of 193K. However, the prior month’s numbers were revised upward to 135K from an original low reading of 103K. Average Hourly Earnings did not grow as forecast, just going up by 0.1%, but the Unemployment Rate did decline to 3.9% from 4.1%, falling fellow the predicted 4.0% for April. The drop seems to be quite a dollar-positive at the time of writing.
The Euro fell by 1.6% this week nearing its worst level for 2018. The expectations for hiking rates are basically fading with a cautious approach by European Central Bank officials and recent economic indicators indicating the accommodative environment needs to be left undisturbed. We see Euro staying under pressure for May unless new revised data paints a better picture of what looks like a slow Q1.
The Pound dropped in value by 1.8% throughout the week as cold hard numbers finally served as proof that Brexit fears are manifesting themselves as low business activity. A loss, once more, for Prime Minister Theresa May in the House of Lords over the concept a new physical border for Ireland and Northern Ireland causes some to speculate that her administration may be nearing its end. Sterling will also face problems throughout May.