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GBP Underperforms, NFP Fails to Support USD - US Market Open

GBP Underperforms, NFP Fails to Support USD - US Market Open

Justin McQueen,

MARKET DEVELOPMENT – GBP Underperforms, NFP fails to support USD

GBP: GBP fell across the board, in the wake of the today’s Mfg. PMI release in which the headline figure fell to a 3-month low at 52.8, below expectations of 53.5. In turn, IHS Markit stated that they see a clear risk of manufacturing sector recession as the Brexit storm continues to dent performance in manufacturing production. GBPUSD found a notable bid at the 200DMA, while EURGBP backed off the 0.8800 handle.

EUR: The Euro is holding relatively well amid the cross-related buying in EURGBP. Eurozone inflation had softened to 1.4%, as expected. However, core inflation saw a surprise notch higher to 1.1% from 1%. Elsewhere, Italian data continues to sag, with this mornings Mfg. PMI report showing another month of contraction. Consequently, Italian bond yields have been tracking higher. Sticking with Italy, recent reports have indicated that Italy may announce fresh elections amid the rift between the Lega and 5 Star Party.

USD: A relatively mixed NFP report did little to support the US Dollar. While the headline payrolls figure smashed analyst estimates at 304k, the sizeable revision to the prior month of -90k, alongside a miss in monthly wages and the unemployment had subsequently taken the shine off the headline number. As such, initial gains in the USD post the NFP release had been quickly pared. Eyes now turn towards the key ISM Mfg. PMI report.

DailyFX Economic Calendar: – North American Releases

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--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.