GBP/USD: UK and US Manufacturing in Focus As Investors Brace For A Busy Week

The US dollar soared 0.5% against the Hungarian Forint on Friday, its best one-day gain in a month. However, this was a case of too little too late as the US dollar totalled losses of 1.5% versus the Forint across the week, closing at 299.40. The US dollar Hungarian Forint exchange rate has advanced in early trade on Monday.

The dollar soared on Friday following impressive non-farm payroll figures. 266,000 jobs were created in the US in November, smashing analysts’ expectations of 180,000. It was the highest headline figure since January. The unemployment level declined from 3.6% to 3.5, the low of 2019 and the lowest level since 1969.

The hourly wages component of the report was strong as well, with average hourly wages increasing 3.1% year on year, above the 3% that had been pencilled in. Average hourly wages are closely watched as they are an indicator for future inflation. The solid jobs report quelled concerns over the health of the US economy, as investors look ahead to the Federal Reserve monetary policy announcement later this week.

Friday’s jobs report supports the Fed’s belief that the US economy is on a solid footing and that monetary policy is appropriate at its current level.  According the CME Fedwatch tool the market is pricing in just a 0.7% probability of the Fed adjusting interest rates.

Investors will also closely watch retail sales and inflation data for a clearer snapshot of the economy heading into the end of the year.

Hungarian Industrial Production Still Strong

Hungarian industrial production continued to show resilience to global woes in October. At the end of last week, data showed that industrial production in Hungary grew 6.4%. Whilst this was worse than the 6.7% expected it is not that surprising given the exceptionally strong September performance that the sector experienced. In September industrial production grew a whopping 9%. Analysts commented that there are signals in the data that a slowdown in industrial production is on the horizon, but the short-term outlook remains strong.

Today trade tensions are weighing on risk sentiment and the Hungarian Forint after President Trump called on the World Bank to stop lending to China. This move will rock already fragile relations between the two powers, just days before the 15th deadline for further tariffs.

This week the most important data release for the Hungarian Forint will be Tuesday’s inflation report. After inflation hit 2.9% in October, analysts are expecting an uptick in prices, with 3.4% year on year inflation pencilled in.


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