The UK Halifax house-price index declined 0.1% for February with a decline in the annual increase to 5.2% from 5.4%. Sterling was unable to make headway ahead of the US open and drifted lower against the Dollar amid pressure for a correction after sharp gains over the past few weeks with a dip to lows below 1.3800.
Bank of England MPC member Haskel stated that he remained open to the need to provide additional support to the economy and the bank must be ready to deploy all tools as needed. The UK currency still rallied from lows against the Dollar to trade around 1.3840 as with the Euro ending little changed just above the 1.1630. There was, however, some evidence of underlying momentum for the UK currency.
Comments from Bank of England Governor Bailey will be watched closely on today, although global trends dominated in early Europe with the UK currency just above 1.3800 against the Dollar and at 1.1630 against the Euro.
US non-farm payrolls increased 379,000 for February which was well above consensus forecasts of 183,000 and there was also a substantial upward revision to the January figure to 166,000 from the original figure of 49,000. There was a surge of 465,000 in private payrolls for the month.
Manufacturing payrolls increased 21,000 following the decline for the previous month, but construction jobs dipped 61,000 on the month due to adverse weather conditions. There was a recovery of over 350,000 jobs in the leisure and hospitality sector.
The unemployment rate declined to a 10-month low of 6.2% from 6.3% previously. The participation rate was unchanged at 61.4% and the household survey recorded an increase in the number of employed of 208,000. Average hourly earnings increased 0.2% to give an unchanged annual increase of 5.3%.
The data boosted confidence in the US labour market which also maintained confidence in the dollar.
On Saturday, the US Senate passed the $1.9trn fiscal stimulus Bill after a marathon session with some amendment. The centre-piece of the Bill is a $1,400 payment to most citizens which will boost short-term demand. The legislation should come into law this week with President Biden aiming for direct payments in two weeks. The dollar maintained a firm tone, although US futures moved lower and bond markets attempted to stabilise.
The Euro has retreated to the low 1.19s, having printed a high over the 1.1930 against the Dollar during the Asian session. The pair opened the week on a positive note with the Dollar nursing losses across the board in the wake of the US Senate's passage of President Joe Biden's $1.9 trillion fiscal stimulus plan.
The Euros downside could continue to gather downside momentum as the German Industrial Production missed its expected numbers. With the Eurozone Sentix Investor Confidence data expected shortly, another miss will likely damage any short term Euro gains.
Data to watch
05:00 - GBP - BOE Gov Bailey Speaks
Posted in Daily Market News on Mar 8 2021