GBP/USD has started the week with considerable losses, after posting sharp gains on Friday. Currently, GBP/USD is trading at 1.3106, down 0.52% on the day. British banks are close for the May Day holiday and there are no British events. On Tuesday, Germany releases factory orders and the EU posts its economic forecasts of member states. The U.S. will post JOLTS Jobs Openings.
The pound ended the week on a high note, soaring 1.1 percent. Investors reacted positively to the comments from BoE Mark Carney on Thursday. The BoE maintained interest rates, but BoE Governor Mark Carney had a hawkish message for the markets. Carney said that there could be a number of rate hikes from the bank, if Brexit is resolved and growth and inflation point higher. The markets have priced in just one rate hike until 2021, so Carney’s comments mark a vote of confidence in the British economy from the BoE. There was more positive news on Friday, as services PMI improved to 50.4 in April, up from 48.9 a month earlier.
In the U.S., the week ended with mixed employment numbers. Wage growth edged up to 0.2%, shy of the estimate of 0.3%. However, nonfarm payrolls sparkled, climbing to 263 thousand, up from 196 thousand a month earlier. The reading easily beat the forecast of 181 thousand. The unemployment rate dipped to 3.6% in April, down from 3.8% a month earlier. This marked the lowest unemployment rate since 1969.