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British Pound, US Dollar, Euro – Commentary and Exchange Rates – UPDATED Daily

British Pound, US Dollar and Euro commentary is provided by Argentex for Tuesday 4th April.

GBP

The pound started the second quarter of 2017 in a similar fashion to the way it started the first: with losses against its major counterparts.

It gradually lost ground against the euro and the dollar and this slide was not helped by Manufacturing PMI which unexpectedly dipped for the month of March.

It seems a while since economic fundamentals were discussed when analysing the FX markets. The temporary lull before the next Brexit debate reaches the headlines has given traders a chance to revert back to the traditional market movers that can be slightly easier to digest. Today we could see more of the same as Construction PMI is released which is expected to dip, and if so, will be another sign of an economic slowdown within the UK. Whether this has an impact on the pound awaits to be seen, but for now it all seems relatively quiet in the markets. Now, back to Brexit… (I told you it was only a temporary lull) – the European parliament will be making its declaration on Britain’s withdrawal from the EU and triggering of Article 50. As always, even if nothing extraordinary is proclaimed, this still has potential to upset the markets and create widespread volatility.

USD

Philadelphia Fed President Harker said in an interview with Reuters that he thought the Fed should raise rates twice more this year, to avoid rushing its tightening plans.

The Institute for Supply Management and Markit Economics released reports on surveys of US manufacturers conducted during March. The results showed a slowdown in activity to a six-month low, with Chris Williamson, chief economist at Markit stating “the post-election resurgence of the manufacturing sector is showing signs of losing steam”. JP Morgan said in a research note that although Trump’s failure to push through healthcare reforms hurt stocks, it has focussed lawmakers on tax reforms earlier than expected, which is what the stock market actually cares about. Trade Balance and Factory Orders out today won’t be as impactful as tomorrow’s ADP employment report, FOMC meeting minutes and Friday’s Non-Farm Payrolls.

 

EUR

After a 2% weakening against both the US Dollar and Sterling since Friday, the single currency clawed back 0.4% on average throughout the trading day yesterday.

The Euro should see some sensitivity to the latest ECB minutes on Thursday, as Euro watchers will be looking for greater clarity on the Governing Council’s policy outlook after last week’s ECB news flow.

Major data from the Eurozone today, with retail sales for Febuary released at 10am GMT . Expectations are for a decent figure at +0.5%, compared to the weak showing from January of -0.1%. Aside from today’s data, expect any updates from the poles in the French election, hinting LePen continuing her increasing popularity to quickly weaken the single currency.

ZAR

South Africa is having a bad time of it, again.

The recent sacking of finance minister Pravin Gordhan was endangering the economy, and there are concerns over the serviceability of government debt, specifically the cost of supporting state energy firm Eskom. Ratings Agency S&P downgraded South African government debt to ‘junk’ status, which will increase borrowing costs further.

 

Equities

CLOSE CHANGE %
DAX 12,257.2 -0.90
FTSE 7,282.69 -0.55
DJI 20,650.21 -0.07
S + P 2,358.84 -0.15

Commodities

CLOSE CHANGE %
Gold 1,253.35 +0.34
Oil 53.12 -0.93
Silver 18.26 +0.02
Copper 260.35 -1.88

Economic Releases

TIME REGION EVENT EXPECTED PREVIOUS
0800 EUR Spanish Unemployment Change -41.2K -9.4K
0930 GBP Construction PMI 52.5 52.5
1330 USD Trade Balance 57.2 -46.0B -48.5B
1500 USD Factory Orders m/m 1.0% 1.2%
1530 EUR ECB President Draghi Speaks
The information contained in this document is collated from third party sources which are deemed to be accurate and correct. Argentex makes no warranty as to its accuracy or correctness. This document is provided as an information source only and is not to be constructed as advise or solicitation to enter into any agreement to buy or sell any currency whether with Argentex or a third party.

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