blackfriars bridge evening

Draghi’s vote of confidence results in a late euro rally

5th May 2017 Market Update

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🇬🇧 GBP – It was very quiet on the data front for the pound yesterday, which was outlined by the lack of rate movement for the majority of the day. As mentioned above the pound did come under pressure towards the end of the session against the euro, but has since regained much of the losses.

Today, we see no scheduled data releases in the UK with the US jobs figures and French elections taking the limelight, the pound will be at the mercy of the dollar and euro movements.

🇪🇺 EUR – The euro traded at relatively flat levels against both the pound and the dollar for the majority of the UK trading session. We did however see a bit of euro strengthening around 5pm which was caused by Mario Draghi, president of the ECB, who spoke passionately about a ‘United Europe’ and said they need to stick together more than ever at this time of crisis, under common rule. This evidently gave traders confidence at the back end of the session, hence the euro rally.

In terms of notable data yesterday we had Services PMI Figures first thing, which came in very slightly above the prediction. There are no scheduled data releases due today, thus the euro will likely trade based on speculation on the French Elections over the weekend.

🇺🇸 USD – There was no data of note out from the United States yesterday and the rates against the pound remained pretty stable throughout the day.

Today, all eyes will be on the data screens this afternoon when the US nonfarm payroll and unemployment figures come out. Any readings too far out from the predictions and we’ll possibly see the GBP/USD rate break key psychological levels. The USD seems to be on the back foot at the moment having lost 5 cents against the pound in the last month.


Key Announcements

🇺🇸 USD
12:30pm – Nonfarm Payrolls, (previous 98k, expected 180k) the positive result expected could strengthen the dollar.
12:30pm – Unemployment Rate (previous 4.5%, expected 4.6%)
5:30pm – Fed’s Yellen Speech.


Our View: All eyes will be on Nonfarm payrolls and unemployment rate figures from across the pond which are arguably the two most significant pieces of data released affecting the greenback. In addition, the final stage of the French elections will be held over the weekend, with results due in on Monday, this could see some volatility in the euro, thus it could be worth speaking to your dealer to discuss hedging your requirement.


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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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