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Dollar correction continues

We start a new month with many countries observing a Bank Holiday either today or next Monday so we are likely to see a couple of quiet sessions, in particular since there is no nonfarm payroll release today, which happens next Friday instead. We saw little in the way of overnight action from the Asian markets and today sees manufacturing survey data from the UK and US, as well as the US Michigan Consumer Sentiment, which could cause some movement for sterling and the dollar.

As we look back at this week it will be remembered for the continuation of the US dollar correction. Since the middle of March when the dollar marked its eleven year high, the dollar index has given back 5.6% as investors absorbed data releases for the month of April that were far from encouraging and most, if not all, have kicked the prospect of a June rate hike by the Federal Reserve into the long grass. Although a week away this makes next Friday’s nonfarm payroll a key figure for the Fed, where unemployment is expected to decline from 5.5% to 5.4% with the headline figure jumping from 126k to 208k.

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