FX round-up: Dollar bounces back ahead of Yellen, jumps against peso, Loonie

The pound was on the backfoot as the US dollar rebounded following its weak start to the holiday-shortened week in the States and after the US president elect voiced criticism of a weaker Chinese yuan.

Similarly, traders in the Sterling crosses may have opted to take some profits after the sharp jump seen in the British pound´s cross against the US currency during the previous session.

Against that backdrop, as of 2010 GMT cable was down by 0.8% at 1.2297, while the US dollar spot index was climbing 0.60% to 100.93.

Helping the dollar along, a report late in the day that incoming US trade chief Wilbur Ross might seek to re-open the 1994 NAFTA trade deal in the days following his inauguration sent the Mexican peso and Canadian dollar rapidly lower, with the former plumbing a new record low.

The USA´s Wilbur Ross notified Canada that a formal notification letter to open negotiations on NAFTA would be sent to its Canadian and Mexican partners within days of the upcoming presidential inauguration, on 20 January, The Globe and Mail reported.

Back in the UK, the latest employment report, referencing the month of December, revealed that job creation had fallen to its lowest quarterly year-on-year pace since mid-2013.

On a more positive note, average weekly earnings grew at a 2.8% year-on-year clip (consensus: 2.6%), up from 2.6% in the month before.

Nonetheless, economists at Barclays told clients: "In a speech last week, he highlighted that UK-specific features of the labor market (fragmentation, self-employment, etc) may have loosened the link between the low unemployment rate and rising wages. We believe he is right and real income will increasingly come under pressure in the course of this year and next as inflation picks up towards 3%, leading to a consumption-driven slow down in overall activity."

To take note of, markets were awaiting a speech from Fed chief Janet Yellen and the release of the minutes of the US central bank´s most recent rate-setting meeting both of which were due later in the day.