To the UK first; GBP clawed back losses yesterday following a good showing for Q1 construction figures, seeing it gain against both USD and EUR. While results were lower than the anticipated level of 63, they did come well above the crucial 50 level which is the benchmark at which the UK improves and may also be seen as the critical level at which the Bank of England has to tighten its monetary policy. Overall, theis kind of data does well to bolster the opinion that the UK’s economy is on the up and heading towards a mid-2015 interest rate hike.
There was little out of the Eurozone yesterday, with EUR losing out to the fellow majors. There was some positivity from the IMF with their report on the Cypriot economy that showed things are beginning to stabilise there following their €10Bn bailout last year. The worry for the Eurozone comes in the form of unemployment figures which show a steadily rising figure. There might be a ray of hope, however, with Spain showing a decrease in those out of work by 16,620 from Feb. There is still quite a way to go for the struggling country where the jobless rate is the 2nd worst in the EZ, but something is better than nothing.
Across the pond, USD saw gains against EUR on the back of good private sector employment figures for the last 3 months. A total of 191,000 jobs were seen to be added last month. US factory orders were also on the rise with a 1.6% increase in Feb – the highest increase for 5 months, a following on from a decline the previous 2 months. All eyes are on Friday now when we see the release of non-farm payrolls figures – if these come in better-than-expected, we could see a hastening of an interest rate hike.
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