With industry in trouble, can we build a better economy?
The Euro finished the quarter on a mostly strong footing, rallying against both the Pound and the Dollar. The single currency will look to continue its gains as we have Producer Price Index (PPI) and Unemployment Rate for the Eurozone due before noon. A positive print today could push the GBPEUR pair to the lows of September 2015.
Sterling fell victim to the Dollar bulls on Friday as higher US wage growth dissipated previous Dollar weakness and Cable retraced from the 1.4400s we saw early last week. This morning’s UK Construction PMI will hold more interest as the upward revision of UK Q4 Gross Domestic Product (GDP) last week was mainly due to construction sector performance. A poor reading this morning could add to Sterling woes. Though a surprise uptick to expectations could help the Pound battle back to 1.4250 levels against the Dollar and 1.2500 against the Euro.
U.S. non-farm payrolls rose by 215,000 last month vs a market consensus of 205,000. Average hourly earnings also came in slightly above expectations, highlighting the ongoing, steady recovery of the US economy. Despite the positive data, the Dollar starts off this week on the defensive with net long positions falling to their lowest in nearly two years. With Janet Yellen stating last week that the Fed has pushed back any further rate hikes due to worries about overseas economies, it is no surprise to see the lack of Dollar strength on the back of the strong jobs report. EURUSD opened at 1.1381 on Friday morning, and the Dollar did push the pair down to the 1.1340 level on the back of the data but gave up all of the gains to open this morning at 1.1394.
Data to watch: 9.30 UK PMI Construction (Mar). 10am EUR Unemployment Rate (Feb). Producer Price Index (MoM)(YoY)(Feb).