Friday 2nd May 2008
The post Fed dollar weakness was short-lived and yesterday we saw the US currency rally well once again as US data releases also encouraged traders/investors back into the dollar. Reports Thursday showed manufacturing activity shrank less than expected in April and consumer spending rose in March and such data is expected to reinforce expectations that the fed will keep interest rates on hold for a while.
Overnight the dollar has held steady against a basket of major currencies as we await the significant April jobs data later today. NFP is forecast to show a loss of around 80k jobs but we would warn that this number could well be very much different and a watching brief is the best strategy for the next few hours.
Sterling took a nasty little 'about turn' yesterday and we would warn again that for the time being positive Sterling signals must be treated with care.