The Bristh Pound/U.S. dollar (GBP/USD) currency pair ended higher last week on the back of surprisingly stronger-than-expected UK economic data and as the dollar eased along with expectations about an imminent rate hike in the US. But the Cable did sell off heavily on Friday, which took some shine off the week’s rally.
Crude oil prices fell nearly 3% today as China ramped up exports of refined products, U.S. oil producers added rigs for an eighth consecutive week, and prospects emerged for increased exports from Iraq and Nigeria.
The dollar displayed extreme signs of sensitivity on Tuesday with prices left vulnerable to heavy losses as expectations fluctuated over the Federal Reserve raising U.S. interest rates in 2016. Conflicting data such as the strong NFP and poor retails sales have placed the dollar in a fierce tug of war with investor anxiety mounting ahead of Wednesday’s FOMC meeting minutes.
While there was a lot of talk about Friday’s Baker Hughes rig count, it is what they did not tell you that may be what counts. On Friday, Baker Hughes reported that the number of active U.S. oil rigs increased by 17--the seventh weekly increase and the most in a year.
Friday’s incredibly impressive U.S. jobs report sent the U.S. dollar and equities higher, with S&P 500 and Nasdaq ending the week at new record highs. The 255,000 jobs added in July and 292,000 in June, made the markets look beyond the weak release in May of only 24,000 additional jobs.