Friday was another poor day for the US dollar in terms of data. Surprisingly, the US dollar strengthened against sterling, falling back down to the 1.51 level. This was mainly due to sterling weakness seen in the afternoon. The US ISM manufacturing Purchasing Managers’ Index (PMI) fell against expectations, barely showing growth in the already struggling sector.
Today will see the release of non-manufacturing PMI, with positive growth expected. Trade balance figures are also due for release – here, we expect a continued deficit. With the all-important non-farm employment data due on Friday, the spotlight will be on the employment and unemployment indicators. The main non-farm employment figure is forecast at a larger increase than in the previous month. However, with recent weekly unemployment figures being mediocre, we could have a more lacklustre result.
The General Election in the UK on Thursday is also likely to affect the performance of the US dollar against sterling.