The dollar is back on its feet, having risen across the board yesterday. With a Fed firing the starting gun on its normalization process, momentum on the monetary policy divergence story seems to be swinging back towards the US which is putting a solid floor under the dollar.
Today, we’ll see US payrolls for October. Market consensus suggests a 450k increase in the headline number, as the resumption of in-person teaching in schools should have encouraged many to go back to work. From an FX perspective, we think risks are skewed to the upside. A below-consensus read may not prove enough to fully erase the dollar’s momentum that built up yesterday, especially considering that: a) Fed tightening expectations are not too aggressive, b) the last two NFP reads missed expectations, but the dollar losses were quite contained Most think that a stronger than expected read should fuel speculation about a faster tapering and/or earlier tightening, all to the benefit of the dollar.
CAD - Canadian Dollar
The Canadian dollar is moderately weaker on the week, moving broadly in line with the bloc of commodity currencies. The question now is whether the upside correction in USD/CAD will extend meaningfully above 1.2500. We think this should be down mostly to external factors, as the domestic story of imminent BoC tightening remains likely supportive. Today’s jobs data in Canada should see a slowdown in hiring but unless we see a negative headline number we doubt CAD will take a hit today. Still, with a balance or risks skewed to the upside for USD ahead of US NFP, we think a move above 1.2500 in USD/CAD could be on the cards today.
EUR - Euro
The conservative hold by the Bank of England clearly had an impact beyond the UK's borders, and particularly on the ECB rate expectations, as markets scaled back tightening bets and no longer see an ECB rate hike in 2022. Earlier this week, President Lagarde reiterated her view that conditions for tightening will not be met by next year. Today, we should see a bunch of headlines from ECB speakers they have been quite ineffective on the market and we wouldn’t expect anything different today. Retail sales data for September out of the eurozone should also have a negligible market impact.
GBP - British Pound
GBP/USD sold off around 1.5% in the aftermath of the Bank of England’s decision to keep interest rates unchanged. It appears that policymakers wanted to see more data on the jobs market before starting the tightening cycle. We’ll get two jobs reports before the next BoE meeting on 16 December, and we expect the dataflow to prove all in all supportive for a 15bp December hike.
Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.
Sign up to receive the latest market news from our experts.
Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.