The ECB meet today – expect euro volatility | Smart Daily Currency Note
GBP/USD – 1.5542
Sterling enjoyed a good day yesterday, rising to an eleven week high against the US dollar, helped by better than forecast Purchase Managers’ Index (PMI) data for the manufacturing sector. Britain’s factories output seems to be stabilising in April after months of contraction, sending sterling upward amidst hopes the recovery is consolidating and with export orders rising for the first time in over a year from demand outside the Eurozone. Today sees the same release for the construction sector which has been contracting consistently for the last six months – if it follows yesterday’s trend we can expect sterling to react positively, though prices remain susceptible to any hint that the recent bubble of strong data could burst. Call in now for the latest news and up to the second rates.
The US dollar weakened yesterday on the news that fewer jobs were added than expected in April. Whilst the US dollar dropped on the back of the news, more pressing perhaps is the fear this data points to an increase in the overall rate of unemployment alongside a poor reading for the highly influential non – farm payroll data both of which are released on Friday. The US dollar did strengthen later in the day but last month’s trend of soft data appears to be continuing. The other major announcement yesterday was the confirmation that the Federal Bank had left rates unchanged at 0.25% and would stay that low until the unemployment rate reached 6.5%. They also indicated that they would be willing to increase liquidity to the market if growth continued to fall which is a shift from the emphasis of their announcements earlier this year. Today will be significant, with the Trade Balance report released alongside more labour related data in the form of the weekly unemployment claims levels. Call in for how prices react to market developments.
Sterling gains against the US dollar | Smart Daily Currency Note