PDQFX Menu

// GBP

Friday 3rd March 2017

The UK construction PMI index was slightly stronger than expected with a small increase to 52.5 from 52.2 the previous month.

The UK construction PMI index was slightly stronger than expected with a small increase to 52.5 from 52.2 the previous month. There was a significant slowdown in the house-building sector while there was an improvement in the civil engineering sector which could offer some reassurance over investment trends.

Overall yield trends remained negative for Sterling as gilt yields remained negative in real terms which will tend to curb potential international inflows. Weaker commodity prices also tended to have some negative impact on the UK currency. Sterling remained on the defensive on Thursday, although there was some support on approach to the 1.2250 against the dollar and the Euro hit resistance on approach to the 0.8600 area. The services-sector PMI index will be watched closely on Friday for further evidence on trends in growth and inflation which will have important implications for monetary policy.

// EUR

Friday 3rd March 2017

Provisionally, Euro-zone consumer inflation rose to 2.0% for February from 1.8% and was in line with expectations.

Provisionally, Euro-zone consumer inflation rose to 2.0% for February from 1.8% and was in line with expectations, although this was the strongest reading for four years. Unemployment held at 9.6% for January with markets waiting for any signal of a policy change from the ECB and the inflation data did not provide support to the Euro. Policy is expected to remain on hold at next week’s Council meeting, although comments from President Draghi will be watched closely.

// Rates

Friday 3rd March 2017

Morning Market Rates: (Please note: These are indication prices only, they are not offer rates)

GBP/USD: 1.2259

GBP/EUR: 1.1652

GBP/AUD: 1.6212

GBP/CHF: 1.2420

GBP/ZAR: 16.0459

GBP/JPY: 140.1140

USD/ZAR: 13.0775

EUR/USD: 1.0522

EUR/ZAR: 13.7690

GBP/NZD: 1.7424

GBP/CAD: 1.6434

GBP/AED: 4.4991

// USD

Friday 3rd March 2017

US jobless claims declined to 223,000 in the latest week from a revised 242,000 previously.

US jobless claims declined to 223,000 in the latest week from a revised 242,000 previously. This was the lowest reading in the current economic cycle and the lowest since 1973 which maintained confidence in a very firm labour market and expectations that the Federal Reserve would move to tighten policy in the short term. Fed Governor Powell maintained an optimistic tone on the outlook and stated that the Fed was very close to meeting its 2% target while a rate increase is on the table for discussion at the March FOMC meeting.

Increased expectations of a March Fed tightening continued to support the dollar, although the Euro did find some support on approach to the 1.0500 level as markets had already moved closer to pricing in a US rate hike with futures markets indicating over a 75% chance of a move. The Euro found some support at the 1.0500 area without making any significant headway as markets waited for comments from Fed Chair Yellen and Vice-Chair Fischer after the European close on Friday.

Sign up to receive our daily currency updates

PDQFX

Sign up to receive our daily currency updates