A dramatic week ended with the release of the US non-farm payrolls which showed the world’s biggest economy created 175,000 jobs last month. Markets were pleased to see that this beat the forecast number of 170,000, however, the unemployment rate increased a notch to 7.6 per cent from the previous reading of 7.5 per cent. The jobs number fell in balanced territory, as while being a relatively strong number, the unemployment rate increase may discourage the Federal Reserve from acting too soon on a pull back in monetary policy.

There is little data on agenda, with French industrial output data already having been released. The figure came in at 2.2 per cent, easily beating expectations of a 0.3 per cent increase. European sentiment data is also due.

UK investors may look to events for more insight into the pound’s recent progress, with manufacturing data due and monthly unemployment figures due for publication.

Sterling

After a strong week, some of the pound’s gains against the US dollar were wiped out after investors turned back to the greenback following the release of positive US employment figures for last month. The Bank of England announced no change to interest rates or monetary policy, which pleased investors, while also announcing some impressive PMI numbers beforehand.

US dollar

The greenback halted its recent slide after investors reacted positively to the non-farms payroll report after it showed more jobs were created than expected last month. The figure came in at 175,000 beating the forecast number of 170,000, however, the unemployment rate rose to 7.6 per cent from the previous reading of 7.5 per cent. Despite this, the news was deemed positive due to the extent of uncertainty leading up to the release after fears had flooded markets that a poor number would underline the necessity for the Federal Reserve to maintain current monetary easing measures, rather than reducing them, as has been the intention of the Federal Reserve until now.

Euro

The euro has made a positive start to the week after French industrial data easily beat expectations of 0.3 per cent growth for April, coming in at 2.2 per cent. European sentiment data is also due. This follows a disappointing week for the single currency whereby the ECB failed to announce any change to interest rates after some analysts had predicted this would not be the case.

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