In today’s session, all eyes will be on whether the US employment report supports the case for the Fed to raise its interest rate this year, amid the recent rout in financial markets that has threatened to dent growth and depress inflation. The September payrolls report is anticipated to show that US employers added jobs at a robust pace, signalling that the nation’s labour market continues to strengthen.

Data released just now which indicated that UK‘s construction sector experienced better than expected activity growth in September, was reassuring for the British economy. Meanwhile, the ECB Chief last night stated that the Euro area is returning to sustained growth aided by the central bank’s aggressive monetary policy.

Pound Sterling – UK Markets

Markets just now received another cue on the health of the UK economy in the form of the latest publication of construction PMI data for September. The Pound is trading on a stronger footing against the US Dollar morning, after the construction PMI release revealed that Britain’s construction industry expanded at a healthy pace in September, driven by fast and continued growth in activity in the house building sector. The upbeat data has reinforced views that the construction sector is set to make a stronger contribution to economic growth in the third quarter of this year. Investors now look forward to the release of US datasets later in the day which could help to provide clarity on the likelihood of an imminent rise in the Federal Reserve’s benchmark interest rates.

Yesterday’s UK manufacturing PMI printed above expectations for September, however, the survey was broadly consistent with stagnation and showed that firms were prompted to cut jobs for the first time in two-and-a-half-years.

US Dollar – US Markets

The US Dollar has edged higher against the Euro and the Japanese Yen this morning. Meanwhile, investors seem to be treading cautiously ahead of the crucial US nonfarm payrolls report which could become a major influence in this month’s Federal Reserve decision on interest rates. Over the past week, wide range of views from a number of Fed speakers has fuelled uncertainty over the direction of the Fed’s next policy meeting. In today’s nonfarm payrolls data, traders will look forward to any upward revision to the August numbers and eye a reasonably strong recovery for September. The unemployment rate is projected to remain at 5.1% for September, while markets anticipate average hourly wage earnings to have eased last month.

After the US payrolls report, factory orders data is scheduled for release which might draw some market attention. Sentiment towards the manufacturing sector remains weak at the moment, with manufacturing numbers released in the past few days turning out to be disappointing. Expectations are for today’s update to show a further decline in factory order growth for August.

Euro – European Markets

The shared currency continues to be weighed down against the majors this morning, following disappointing economic data from the Euro zone and its economies in the past few days. Speculations are rife that the ECB would be pressured to expand its asset purchase programme after data earlier this week showed that the Euro zone fell back into deflation territory suggesting continued pricing pressures. In addition, a gauge of manufacturing PMIs from the Euro zone and its peripheries in yesterday’s trading session, further added to expectations of more aggressive monetary expansion by the ECB. Data revealed weakness in the manufacturing sector for Germany, Italy and Spain. Although production in France ticked higher for September, expansion was not sufficient enough to boost the Euro against its key peers.

It is a light calendar day in the Euro zone today, with only the region’s producer prices data scheduled for release in a few minutes. Today, trading in the Euro against the US Dollar and Sterling will largely be influenced by key nonfarm payroll additions in the US economy and UK’s construction PMI.

Other Currencies – Highlights

The Aussie Dollar regained some ground against the greenback earlier in the day after data showed that retail sales in Australia rose in line with expectations for August, following a slip into contraction for the first time in over a year for July. The August retail sales figures were boosted by strong sales in food retailing and department stores, while clothing and footwear sales in the same month dropped sharply. The upbeat retail sales data is an indication that the Australian economy might be transitioning away from its reliance on the commodities sector and taking support from consumer spending. The nation has been struggling over the past year due to lower commodity prices and a slowdown in China, its largest trading partner.

Currently, the Aussie Dollar – US Dollar currency pair has surrendered some part of its gains ahead of the release of US employment data later today, which might influence the timing of a Federal Reserve rate rise.