The USD has been rallying following a strong US labour market report out on Friday afternoon.
The data showed strong rebounds in job creation (+353K jobs vs expected +180K), average earnings (4.5% vs expected 4.1%) and a fresh drop in the unemployment rate (3.7% vs expected 3.8%). This report, along with the Feds pushback against the market’s March rate hike, has forced traders to pare back to near zero chances of a March rate cut by the Fed, which has sent the USD higher.
As a result, the GBP/USD has fallen over 2-cents from Friday’s high and now trades at the lowest levels since the 13th December. The EUR/USD has fallen around 1.5% since Friday’s US labour data and now trades close to the lowest levels since the 14th November. Major data releases are relatively sparse this week and further direction may be provided from various speeches by different Federal Reserve policymakers.
