UK growth data due this week
A market update from Carl Hasty, director of Smart Currency Business.
A mixed end to the week for sterling saw it hit a fresh 15-month low against the euro before recovering slightly in the afternoon to rise from these levels, giving sterling investors some hope heading into a new week.
With the Easter bank holiday weekend resulting in reduced trading volumes, sterling has seen a slight boost at start to the week. No significant economic data releases are expected until later in the week, with the latest current account released on Thursday. Confirmation of final economic growth throughout the UK over the past quarter will follow shortly after, although this is likely to have a reduced impact due to earlier estimates. Finally, Purchasing Managers’ Index (PMI) data from the manufacturing industry will provide the first indication of sector growth throughout March, with further figures following next week.
Eurozone consumer confidence data due this week
The euro had a mixed week last week, strengthening significantly against sterling as it pushed to its highest point in 15 months on Thursday. This was for the same reasons as before, with the uncertainty over Britain’s future in the European Union continuing to pressure sterling. However, the single currency performed relatively badly against the US dollar, after worse-than-expected data came out of the Eurozone, which worked against the single currency.
As it was a bank holiday last Friday and yesterday in the UK, liquidity was low in the market so we may well have seen some fluctuations on Monday. It is a quiet start to the week in terms of Eurozone economic data, until Wednesday, when consumer confidence figures are due. Thursday will bring German unemployment figures.
Data releases could affect US dollar
We can expect a host of data releases for the US this week. Personal spending and personal income data were released yesterday, followed by consumer confidence on today. The major release for this week will be the non-farm employment change on Friday. With this in mind, various related indications are released on Wednesday and Thursday. Given the amount of data out this week, there is plenty of opportunity for movement in US dollar markets.
Worldwide currencies looking towards US growth data
Matters outside of the UK, eurozone and US were muted on Thursday, given the bank holidays in both New Zealand and Australia. In Japan, Tokyo’s price index was forecast to come up shorter than previously, potentially resulting in weakness for the Japanese yen. Reactions in the market are likely to be soft, given that most traders will be enjoying their holidays and any change in the market will have been priced into the market already.
Markets will remain flat on Friday unless the US final growth data throws any surprises that could affect its peers. Other than that, the Bank of Japan will release its Core inflation data, with the expected outcome to remain the same as the previous month’s.