Yesterday we saw the UK’s current account balance fall to a two year low (3.6%) of GDP – this is a marked difference from last year when we saw the level sitting at an unacceptable 5.1% and this news will bring some relief to the BoE. On the other hand, consumer sentiment in the UK was seen to fall following concerns over China and the migration issues facing Europe which have affected the will to spend. Open opening yesterday, GBP initially gained against USD on the back of trade balance data but his dropped off as the day progressed. Against the EUR, the pound only managed to gain half a percent as the day progressed and closed. From the UK today is just manufacturing PMI data which is expected to show that this sector is still struggling somewhat. Other than that, eyes will be more on the US which has important data out.
In Europe, the negative inflation rate was seen to fall again with a yearly drop of 0.1%. This has been attributed to the oil and energy price drop last month. This is the first time a drop has occurred since the start of the year when the QE programme got going. On the other hand, core inflation is sitting pretty at 0.9%. Data out today for the Eurozone includes manufacturing PMI but will not have much (if any) impact on the euro’s strength.
From the US we saw a bit more data with meat in the form of ADP employment numbers which came in better that expected at 200K. Chicago’s PMI was seen to fall, however, missing the estimated 53.0 level by coming in at 48.7. Today we’ll see ISM manufacturing number which will give us more insight into the state of the manufacturing sector. Friday’s non-farm payrolls will be one to watch as well which will tie into the (good) ADP figure above.
FC Exchange is a trading name of Foreign Currency Exchange Limited. Registered office: Salisbury House, Finsbury Circus, London, EC2M 5QQ. Registered No.5452483. Authorised by the Financial Conduct Authority (No.511266) under the Payment Service Regulations 2009 for the provision of payment services. HM Revenue & Customs MLR No.12215508. Copyright © 2013 Foreign Currency Exchange. All Rights Reserved.
Recommended Content
Editors’ Picks
EUR/USD hold comfortably above 1.0750 as USD recovery loses steam
EUR/USD clings to small daily gains above 1.0750 in the early American session on Monday. In the absence of high-tier data releases, the US Dollar finds it difficult to gather recovery momentum and helps the pair hold its ground.
GBP/USD range bound around 200-DMA, awaiting BoE’s decision
The Pound Sterling registers anemic losses against the US Dollar as traders brace for the Bank of England’s (BoE) monetary policy decision on Thursday. The pair remained within the 1.2529-1.2594 boundaries during the last few days, capped by key support and resistance levels. The GBP/USD trades at 1.2556, down 0.04%.
Gold eases toward $2,310 amid a better market mood
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Ripple lawsuit develops with SEC reply under seal, XRP holders await public redacted versions
Ripple lawsuit’s latest development is SEC filing, under seal. The regulator has filed its reply brief and supporting exhibits and the documents will be made public on Wednesday, May 8.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.