Sterling
The euro had a strong end to the week following some much needed positivity being brought to the markets after the President of the ECB suggested the region’s economy will stabilize this year and that their approach to supplying liquidity will be to supportive to growth. This positivity came in spite of political uncertainties in Italy, revised GDP data confirming that the euro-area contracted by 0.6% for the fourth quarter of last year, worse than expected investor confidence figures and below forecast services Purchase Managers' Index data. On a more positive note, retail Sales in the whole area were better than predicted showing an improvement of 1.2% and whilst Spanish unemployment increased, it was at the slowest pace since after the start of the crisis. Today sees monthly German Industrial Production data released, forecasted with the increase of 0.6% giving a brighter economic outlook for the euro-area. Call in now for the latest news from the Eurozone and live prices on the euro.
US dollar
It has been a mixed week for the US dollar, starting the week stronger on the back of data showing that the services sector experienced the fastest growth in a year last month boosted notably by demand for exports which also helped push the Dow Jones to record highs. Strong labour data in the form of weekly unemployment claims and the ADP employment rates in midweek, helped support the US dollar – pushing it to a two and half year high against sterling and points towards a positive reading for today’s highly influential non-farm payrolls figures. These gains were then countered by the monthly trade balance. Released on Thursday, the results were poorer than expected coming with a deficit of $44.4 billion. This brought the US dollar back down to the 1.31 level against the euro. As aforementioned, todays non-farm employment data will be the main release on the economic calendar, alongside the overall rate of unemployment – especially with the Federal Bank’s monetary policy so closely intertwined with an improving labour market. Positive releases should enhance the dollar's position, possibly raising it to new highs for the year.
Worldwide
Elsewhere, the Japanese yen was once again the main talking point of the week, dropping to its lowest level since August 2009 against the US dollar following the Bank of Japan keeping interest rates unchanged at 0-0.1% by unanimous vote. The markets suggest the incoming Governor will look to increase monetary stimulus and debase the currency. The Swedish krona performed well as its central bankers stated that they would not look to devalue the krona in spite of its recent strength, commenting that currency's level was "not in any way remarkable". The Polish zloty struggled owing to Poland's Central Bank cutting interest rates to 3.25%. The South African rand dropped to its lowest level in nearly four years against the dollar following labour protests at mines spurring violence, a repeat of last year which curbed production. The Hungarian forint struggled after markets speculated that the central bank may use its foreign-currency reserves to give the economy a boost. Overnight we saw the release of Japanese current account data and the Chinese trade balance. This morning we will see inflation data for Switzerland and this afternoon we will have a raft of unemployment related data from Canada. Call now for the latest news and updates.
This week has been a tumultuous one for sterling as it began the week in the ascendancy on Monday and Tuesday as traders felt sterling had been oversold. Despite disappointing Construction Purchasing Managers' Index (PMI) data being released on Monday, Tuesdays Services data detailed a significant increase in business activity in the service sector for the second consecutive month suggesting the economy may avoid a triple-dip recession. Tuesday afternoon, however, saw the tides turn again as speculation grew that the Monetary Policy Committee may extend its quantitative easing programs causing sterling to fall below the 1.50 level against the US dollar – a two and half year low. However, as many (but not all the major banks) had predicted, the Bank of England held its asset purchasing programme whilst keeping rates unchanged. This decision caused a knee-jerk reaction in the market pushing sterling up against its major trading partners. We can expect the same sort of volatility when the minutes from this week's meeting are released in two weeks as traders look to see how close the vote was. The afternoon saw much of the early gains slip away, with sterling dropping well below the 1.15 level against the euro, and once again pushing toward 1.50 against the US dollar. Today will be in comparison a quieter one for sterling data with much of the focus on the jobs data out of the States; however, it’s impossible to deny that sterling remains under pressure, so get in touch now for the latest news, and for an up to the second quote.
Euro
The euro had a strong end to the week following some much needed positivity being brought to the markets after the President of the ECB suggested the region’s economy will stabilize this year and that their approach to supplying liquidity will be to supportive to growth. This positivity came in spite of political uncertainties in Italy, revised GDP data confirming that the euro-area contracted by 0.6% for the fourth quarter of last year, worse than expected investor confidence figures and below forecast services Purchase Managers' Index data. On a more positive note, retail Sales in the whole area were better than predicted showing an improvement of 1.2% and whilst Spanish unemployment increased, it was at the slowest pace since after the start of the crisis. Today sees monthly German Industrial Production data released, forecasted with the increase of 0.6% giving a brighter economic outlook for the euro-area. Call in now for the latest news from the Eurozone and live prices on the euro.
It has been a mixed week for the US dollar, starting the week stronger on the back of data showing that the services sector experienced the fastest growth in a year last month boosted notably by demand for exports which also helped push the Dow Jones to record highs. Strong labour data in the form of weekly unemployment claims and the ADP employment rates in midweek, helped support the US dollar – pushing it to a two and half year high against sterling and points towards a positive reading for today’s highly influential non-farm payrolls figures. These gains were then countered by the monthly trade balance. Released on Thursday, the results were poorer than expected coming with a deficit of $44.4 billion. This brought the US dollar back down to the 1.31 level against the euro. As aforementioned, todays non-farm employment data will be the main release on the economic calendar, alongside the overall rate of unemployment – especially with the Federal Bank’s monetary policy so closely intertwined with an improving labour market. Positive releases should enhance the dollar's position, possibly raising it to new highs for the year.
Elsewhere, the Japanese yen was once again the main talking point of the week, dropping to its lowest level since August 2009 against the US dollar following the Bank of Japan keeping interest rates unchanged at 0-0.1% by unanimous vote. The markets suggest the incoming Governor will look to increase monetary stimulus and debase the currency. The Swedish krona performed well as its central bankers stated that they would not look to devalue the krona in spite of its recent strength, commenting that currency's level was "not in any way remarkable". The Polish zloty struggled owing to Poland's Central Bank cutting interest rates to 3.25%. The South African rand dropped to its lowest level in nearly four years against the dollar following labour protests at mines spurring violence, a repeat of last year which curbed production. The Hungarian forint struggled after markets speculated that the central bank may use its foreign-currency reserves to give the economy a boost. Overnight we saw the release of Japanese current account data and the Chinese trade balance. This morning we will see inflation data for Switzerland and this afternoon we will have a raft of unemployment related data from Canada. Call now for the latest news and updates.
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