Friday’s trading was a fairly hasty retreat of the recent (brief) pick up in strength of the Great British Pound. As we saw, last week’s failure of the GBP against the USD to effectively test the higher levels of February then saw a very fast turnaround to push all the way back down again to the 1.51 levels. At the same time, GBPEUR was boarding a similar train southbound. So what happened out there?
Well, this whole (and much hyped) election situation means that generally we would expect weakness for the Pound….but then…some disappointing numbers from the States saw the Pound surge! Could this, coupled with a few changes in the tone of the Fed members, signal a change in the pair’s fundamental appearance? Ah. No, back to reality. Friday saw some disappointing manufacturing numbers from the UK and people seemed to remember that the election is uncertain and tends to provide volatility. Though thanks must go to Russell Brand for his attempts to bolster the Pound by sorting out who we should vote for. It was a noble attempt.
A lot of analysis recently tends to point to a wider expectation that this was a temporary correction and that USD strength is likely to continue during 2015 – even once the election has been and gone.
The economic news expected today includes Eurozone Producer Price Index, which measures the changes in input prices for Producers. The Eurozone will be super keen to see the figure rise to put some pressure on prices of any kind. The USA produce their Non-Manufacturing Purchasing Managers Index today and this is forecast not to change from the last time we saw this figure. Of course, the absolutely critical bit of news today is the Unemployment rate from the utterly beautiful and in all ways mighty New Zealand. Which, naturally, is set to fall.