The U.S. dollar’s selling had paused ahead of Jackson Hole Symposium last week, but then it accelerated again. That was until earlier this morning as since then the dollar has made a small comeback against a number of her rivals due above all to profit-taking. The greenback fell sharply on Friday after Janet Yellen, the Federal Reserve Chairwoman, remained tight-lipped about the future path of U.S. monetary policy.
Earlier today, the latest UK jobs report showed that the unemployment rate dropped to the lowest since 1975, which pushed the British pound higher against the greenback. Despite this improvement, currency bulls didn’t manage to hold gained levels, which resulted in a pullback. How low could the GBP/USD go in the coming days?
The pound, already out of favor ever since the Bank of England's last policy meeting a couple of weeks ago, fell further yesterday in response to softer-than-expected UK inflation figures. The BoE's willingness to keep monetary policy extremely accommodative was beginning to make sense again, especially as the issue of Brexit still hangs over the markets. Today, however, the ONS reported some solid jobs and wages data, which led to a relief rally in sterling.
Any optimism that the South African Rand (ZAR) would continue its attempt to strengthen against the USD, appears to have gone out the window—following the news that Jacob Zuma survived another no-confidence vote.
On the forex front, the euro/U.S. dollar (EUR/USD) currency pair was consolidating above the 1.17 key level, GBP/USD was holding its own above 1.31, while the USD/JPY was clinging onto key support at 110.35. Gold has started a touch weaker after closing up for the third straight week, while copper and crude oil were also in consolidation mode following their sharp recent gains.