Pound (GBP) Rallies on Solid PMI Release
The Pound (GBP) mounted a recovery at the end of last week, rallying in response to the UK’s latest PMI figures.
Sterling sentiment strengthened as IHS Markit reported the UK private sector continued to expand at a robust pace in February, boosting hopes the UK economy will return to growth in the first quarter of 2020.
Looking to the week ahead, it’s set to be a far quieter session in terms of UK economic data.
However, GBP investors may still have their hands full as the Pound is likely to become increasingly sensitive to Brexit developments ahead of the start of trade negotiations next month.
Euro (EUR) Buoyed by PMI Figures
The Euro (EUR) was also supported by some positive PMI figures on Friday, helping the single currency reverse some of its recent losses.
EUR investors were particularly welcoming of a surprising improvement in Germany’s manufacturing sector this month, with factory activity in Europe’s largest economy striking a 13-month high in February.
However, the Euro may relinquish some of these gains at the start of this week’s session, with economists forecast this morning’s IFO business climate index will report German business confidence fell in February.
US Dollar (USD) Slumps on Surprise Contraction in US Private Sector
The US Dollar (USD) was unable to join in the PMI cheer at the end of last week, as IHS Markit reported a surprise contraction in the US service sector this month.
The services index tumbled from 53.4 to 49.4 in February, the first contraction in business activity since February 2016 and well below market expectations.
Coming up this week, we may see the US Dollar come under additional pressure with the publication of the latest US durable goods orders report as economists forecast a sharp drop in order growth at the start of the year.
Canadian Dollar (CAD) Muted as Retail Sales Stall
The Canadian Dollar (CAD) was mostly rangebound on Friday as Canada reported domestic retail sales growth stalled in December, bolstering expectations that the Bank of Canada (BoC) could cut interest rates in the first half of 2020.
Australian Dollar (AUD) Undermined by Coronavirus Fears
The Australian Dollar (AUD) closed last week’s session on a sour note, falling against the majority of its peers as ongoing panic over the coronavirus outbreak in China and its potential impact on the global economy weighed heavily on the risk-sensitive currency.
New Zealand Dollar (NZD) Slumps as Domestic Retail Sales Slow
The New Zealand Dollar (NZD) opens this week on the back foot, sliding through the Asian session overnight after New Zealand’s quarterly retail sales figures revealed a sizable slowing of sales growth at the end of 2019.