United States Dollar: Yesterday saw the release of the monthly Services PMI from the UK which showed a recovery from Februarys 35 month low of 52.7. The March reading came in at 53.7 although this fell short of the 53.9 that had been pencilled in by analysts. Chris Williamson, Chief Economist at Markit which compiles the survey wrote: “An upturn in the pace of service sector growth in March was insufficient to prevent the PMI surveys from collectively indicating a slowdown in economic growth in the first quarter. The surveys point to a 0.4% increase in GDP, down from 0.6% in the closing quarter of last year. With the PMI already in territory traditionally associated with the Bank of England choosing to loosen policy, interest rate hikes seem a long way off.” With the Manufacturing PMI continuing to hover around the 51-52 level and the Construction reading dropping to its lowest in nearly three years on Monday the publication shows further evidence of a slowing economy as concerns about the outcome of the EU Referendum continue to build. There was better news from the States yesterday afternoon with the ISM Non-Manufacturing PMI beating forecast to print 54.5, comments in the report showed an improvement in the sectors health compared to a year earlier. Today’s big release is the minutes from the last FOMC meeting. Following recent dovish comments from Janet Yellen we may see a softening of tone from policy makers hinting at possibly only one rate hike this year. GBP/USD is a cent lower than yesterday at 1.4125..
We expect a range today in the GBP/USD rate of 1.4060 – 1.4240
Euro: Yesterday’s poor German Factory Orders print hit investor confidence hard leading to a sharp sell-off in equities across Europe. The 1.2% drop in the report lead to a fall in the DAX, FTSE and other world bourses. A benefactor from the risk aversion was the Euro with EUR/USD pushing back up towards the 1.14 handle throughout the day. GBP/EUR dropped back below the 1.25 level to hit 1.2410 overnight, its lowest since November 2014. It’s a data thin day from the Eurozone with tomorrows speech by Mario Draghi in Portugal and the ECB meeting minutes the weeks highlights. GBP/EUR is up a touch at 1.2460..
We expect a range today in the GBP/EUR rate of 1.2410 – 1.2560
Aussie and Kiwi Dollars: As is normally the case the Aussie and Kiwi were sold off in risk-averse conditions yesterday with AUD/USD and NZD/USD falling to .75 and .6750 respectively. There is no data of note from the antipodeans for the rest of the week so tonight’s FOMC should be the main driver for the next few days. GBP/AUD is at 1.87 and GBP/NZD at 2.0790..
We expect a range today in the GBP/AUD rate of 1.8630 – 1.8780
We expect a range today in the GBP/NZD rate of 2.0730 – 2.0860
AUD: No Data
EUR: No Data
GBP: No Data
NZD: No Data
USD: Crude Oil Inventories; FOMC Meeting Minutes
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