Dollar loses ground

The dollar lost ground against the euro and sterling over the course of last week, shedding more than a cent against both currencies. Sterling has extended its gains against the dollar at the start of play today trading just north of $1.40, while the euro is not far shy of $1.22, leaving the single currency-pound exchange rate hovering just below 86.5p

The S&P 500 closed on Friday at a new all-time high, despite much weaker than expected job numbers in the US, while European equities advanced over the week. Both German and US 10-year bond yields ended little changed on Friday at -0.20% and 1.58% respectively

The US economy added 266,000 jobs in April according to Friday’s payrolls report, much less than the one million gain expected by the ‘consensus’, though employment growth still averaged a healthy 550k a month over the February-April period. The unemployment rate ticked up to 6.1% last month, mainly reflecting increased participation in the labour force

ECB member Philip Lane Lane says the Euro Area economy “from now on…will be growing quickly, but from a subdued level… so even with pretty rapid growth for the rest of this year, the euro area would only get back to its 2019 GDP level around this time next year”

Data due this week includes CPI inflation for April in the US tomorrow and first quarter GDP in the UK on Wednesday, while the European Commission published updated forecasts this week (Wednesday) as well