Pound Sterling Exchange Rates Weak after UK Service Sector Slowdown
Pound Sterling was left in negative territory yesterday by a worse-than-expected decline in the pace of service sector activity during March. The Markit services PMI was predicted to weaken from 54.5 to 54, but instead dropped to 51.7, with the severe snow experienced across the nation last month partially to blame.
Weak Eurozone Data Fails to Prevent GBP/EUR Exchange Rate from Slipping
The Euro was largely on poor form yesterday as well, thanks to a run of poor Eurozone ecostats, yet the GBP/EUR exchange rate still weakened. German factory orders data for February showed a fraction of the growth that was expected, a number of the finalised Markit services and composite PMIs were unexpectedly revised lower and the pace of Eurozone retail sales growth picked up much less than economists had anticipated.
German industrial production data for February and Eurozone retail PMIs for March are set for release today.
GBP/USD Exchange Rate Slumps as Trade War Fears Weaken
US economic data wasn’t particularly inspiring yesterday, yet the GBP/USD exchange rate was down around half a percent as the end of the London session approached. Markets were cheered by signs that US and Chinese officials are attempting to avert a possible trade war between the two nations. However the afternoon’s data, showing a nine-year high trade deficit for the US in February, could prove problematic if it is seized upon by US President Donald Trump as further evidence that the US has been treated unfairly by its major trade partners.
As well as the hugely-influential non-farm payrolls report and unemployment rate, the US will also publish average weekly earnings data and Federal Reserve Chair Jerome Powell will give a speech on the economic outlook.
Recovering Oil Prices Boost Canadian Dollar and Weaken GBP/CAD Exchange Rate
The GBP/CAD exchange rate fell yesterday, as recovering crude oil prices pushed the Canadian Dollar higher. CAD was able to avoid weakness, even after the latest international merchandise trade figure showed a worse-than-expected widening of the deficit from -$1.94 billion to -$2.69 billion during February.
Canadian net change in employment data and the unemployment rate for March will be published this afternoon.
Strong Demand for Stocks Undermines Australian Dollar and Allows GBP/AUD Exchange Rate to Hold Opening Levels
The Australian Dollar was largely overlooked by markets yesterday, and this helped the GBP/AUD exchange rate to cling on to opening levels. While weakening fears of a trade war increases appetite for risky assets, markets were skipping the high-yield Australian Dollar and heading straight into stock markets, which offer the potential for a greater return on investment.
New Zealand Dollar Weakness allows GBP/NZD Exchange Rate to Advance
The New Zealand Dollar slumped yesterday, weakened by a lack of fresh economic data of note, market appetite for more risky assets and the approach of today’s top tier US data. As such the GBP/NZD exchange rate was actually able to make gains despite the Pound’s weakness elsewhere.