Markets Fall On UK Manufacturing

Yesterday we had a range of data out across the globe with the focus on manufacturing PMI across the EU and the UK. It was a varied range of figures but with the two main ones being focussed on the overall EU figure and the UK. Both missed the mark of expectation but the UK was the greatest shortfall, coming in at 51.6 compared to 52.5, whereas the EU figure was 50.3 instead of 50.5. The result was a drop in sterling’s value across the board.

Still as the pound is still broadly strong with the rumour of interest rate hikes still lingering in the background, it didnt take long for the losses to be made back, especially against the ailing single currency euro, still trading at some of the best rates in over 2 years.

SO on to Thursday and all eyes are focussed on the central bank of the Eurozone.

The European Central Bank could see some QE introduced, which will likely weaken the euro. My personal thoughts are we won’t, as it’s too soon after the surprise interest rate cut last month and the ECB will want to gain a view over time as to how those cuts have helped, if at all. But we could well get an insight into the thinking of Mario Draghi and his ECB cohorts when we get the press conference and statement at 1.30pm BST. It could well throw up some interesting points so we should expect, as always, some volatility this afternoon across the currency markets.

In addition to the central bank policy meetings, we also have UK construction PMI this morning followed by EU PPI inflation figures. This afternoon we have a few releases across the pond in the shape of jobless claims, factory orders and the ISM New York index all of medium note so could well help the greenback continue its run of form. Stay in touch with the brokers here at Currency Index to discuss any upcoming transfer you might have on the cards.