Sterling
The Pound suffered steep losses across the board on Friday as investors reacted to some disappointing UK manufacturing data.
The factory output PMI rose from a 34-month low of 50.8 to 51.0, confounding expectations of 51.2, due to falling orders from key export markets such as the Eurozone and the United States. Soft oil and gas market conditions also played a part in the disappointing figure, as did the ongoing steel crisis.
Euro
The Pound to Euro exchange rate tumbled by over -150 pips on Friday to strike a new 16-month low as underwhelming British data, fears over the future of Britain’s steel industry and EU referendum jitters combined to send Sterling lower.
Data due this morning is tipped to show that UK construction output slowed slightly from 54.2 to 54.1 in March and that Eurozone unemployment remained at 10.3% in February. The day’s economic releases are unlikely to stoke demand for GBP/EUR but it will be interesting to see whether traders send the Pound higher as they lock in profit from Friday’s yearly lows.
US Dollar
‘Cable’ depreciated by around a cent on Friday thanks to better-than-anticipated labour market figures in America.
Markets had been prepared for a headline US non-farm payrolls print of 205,000 and a 2.2% rise in average weekly earnings. However, the actual results showed a 215,000 increase in job creation and a 2.3% surge in wage growth, which helped to rejuvenate demand for the US Dollar.
The ‘Greenback’ also benefitted from a sturdy ISM manufacturing PMI print of 51.8, up from 49.5 previously, and better-than-anticipated University of Michigan consumer confidence survey score of 91.0, up from 90.0.
The US Dollar had suffered steep losses earlier in the week in response to a decidedly dovish policy statement from Federal Reserve Chairwoman Janet Yellen
Canadian Dollar
The Pound to Canadian Dollar exchange rate remained close to 11-month lows on Friday as soft domestic data undermined confidence in Sterling and upbeat Chinese numbers stoked demand in risk markets.
Data released on Friday morning showed that Chinese manufacturing activity accelerated unexpectedly from 49.0 to 50.2 in March, which boosted global risk sentiment and sent the commodity-sensitive ‘Loonie’ higher against the Pound. The Canadian Dollar also garnered support following a decent Canadian manufacturing PMI print of 51.5 in March, up from 49.4 in February.
Australian Dollar
Sterling plunged lower by around two cents against the Australian Dollar on Friday as increased appetite for risk sent GBP/AUD down to a new 15-month low.
The robust Chinese factory output numbers gave the ‘Aussie’ a shot in the arm as a result of increased global sentiment and the positive influence was also felt due to enhanced prospects for trade between the two nations. Remember: China is the largest buyer of Australian goods.
New Zealand Dollar
The Pound spiralled lower by around -150 pips to strike a new 11-month low against the New Zealand Dollar on Friday. The main motivation behind the latest GBP/NZD selloff was the better-than-expected Chinese PMI figures, which were seen to bolster global growth prospects and subsequently lift economic sentiment among yield-hungry investors.
Data Released
09:30 GBP Markit/CIPS UK Construction PMI (MAR) Medium 54.1
10:00 EUR Euro-Zone Unemployment Rate (FEB) Medium 10.3%
15:00 USD Factory Orders (FEB) Medium -1.8%