14 Jan 2014
Flash: Sterling outlier in Non Farm Payroll reaction - Investec
FXstreet.com (Barcelona) - Jonathan Pryor, Corporate Treasury Analyst at Investec notes that the wave of US Dollar selling continued in earnest yesterday after last Friday's poor Non Farm Payrolls release with the Yen, Euro and Canadian, Aussie and Kiwi dollar all being the main beneficiaries.
Key Quotes
“However, Sterling did not follow suit and in fact fell over a cent against the US dollar to make it one of the worst performing currencies on the day as consensual trades such as long GBP/JPY were flushed out, with equity markets also lower and bond markets stronger, reversing the previous trend.”
“The pound remained under pressure all day and we open up this morning a little below 1.6400 and 1.2000 against the Dollar and Euro respectively. Another reason for Sterling’s weakness could be that its performance is becoming more correlated with that of the USD because the UK recovery mirrors that in the US.”
“Both have seen a fall in the unemployment rate in recent months - they are likely to see a withdrawal of easy policy sooner rather than later and both 10yr Gov bond yields appear to be moving in tandem.”
Key Quotes
“However, Sterling did not follow suit and in fact fell over a cent against the US dollar to make it one of the worst performing currencies on the day as consensual trades such as long GBP/JPY were flushed out, with equity markets also lower and bond markets stronger, reversing the previous trend.”
“The pound remained under pressure all day and we open up this morning a little below 1.6400 and 1.2000 against the Dollar and Euro respectively. Another reason for Sterling’s weakness could be that its performance is becoming more correlated with that of the USD because the UK recovery mirrors that in the US.”
“Both have seen a fall in the unemployment rate in recent months - they are likely to see a withdrawal of easy policy sooner rather than later and both 10yr Gov bond yields appear to be moving in tandem.”