Pound loses ground, U.S. Dollar mixed post-labor measure

The U.S. Dollar is trading in mostly familiar ranges with British Pound the biggest mover following a “dovish” meeting for the Bank of England.

Lots of focus on the other side of the pond as a political crisis is also taking place that threatens to oust Prime Minister Keir Starmer. Domestically, while official Non-Farm Payrolls numbers will be missing, private gauges have been released showing that labor is struggling. The January measure for Challenger Job Cuts came in at over 108K jobs for the month when only around 35K were expected. It is the worst reading for the figure to start a year since 2009. Meanwhile, risk-appetite is souring while other market classes continue to deteriorate as Bitcoin collapsed to below $70.0K. Additionally, metals also headed downward, with silver prices crashing by 17.0%.

Overall, there is negative sentiment plaguing trading all across regions with nervousness also surrounding the elections in Japan over the weekend. Furthermore, there is growing geopolitical tension as some ceasefire agreements have come into question while armed conflict seems to escalate in the Middle East and Ukraine. Oil prices are also dropping as demand concerns also emanate from plenty of turmoil. As of now, the Buck is not quite back to playing safe-haven, but it is increasing in value against tender from a few vulnerable countries facing challenges at this moment. The Buck is at a two-week high for now.

What to Watch This Week…

US Nonfarm Payrolls, DELAYED, Feb. 11th
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GBP ⇓

Sterling declined sharply this morning following a gathering of the Monetary Policy Committee that almost resulted in a vote for a cut to interest rates. Out of nine members, just the five to give a majority agreed on keeping policy unchanged while the other four argued in favor of lowering borrowing costs. In their review and outlook, BOE officials foresee inflation falling while also highlighting the U.K. unease financially. Odds of a cut materializing when they meet again on March 19^th stand at 63.0%. Today defied plenty of forecasts visualizing BOE staying put much longer.

CHF ⇓

The Swiss Franc is trying to recover ground after a rough start to February that saw the exchange rate fall 1.5% in value since Friday, the last business day in January. Throughout that trading session, CHF hit its strongest point against the U.S. Dollar since 2011. The Swiss Franc tends to play a safe-haven role, and it seems to be doing so at the moment although its fortunes are also tied to speculation over Swiss National Bank willingness to cut borrowing costs and enter negative (below 0.0%) territory. There is a debate over the pros and cons, but right now there is little chance that SNB officials would vote for a reduction at their March 19^th meeting. However, the market seems open to surprises as SNB members only get together every 3 months.

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