Pound loses further ground to EUR and USD

10 March, 2017

Sandeep Dugg

This week we have seen the pound lose further ground to both the EUR and USD, with further uncertainty surrounding the ongoing Brexit negotiations and with the Scottish government seriously considering a second independence referendum, it has not been a good week for the pound. So far this week we have had no critical data from the UK, but today we have UK manufacturing and industrial production figures and may see positive news for the pound. Philip Hammond delivered the UK budget on Wednesday and did not have a big impact on currency markets but announced some changes for self-employed and business taxes.

Yesterday the European central bank left interest rates unchanged and mentioned that they would continue with asset buying program until the end of the year. Mario Draghi highlighted that the European Central Bank will continue to monitor inflation and forecast it to be 1.6 percent by the end of 2018 compared 1.5 percent in last December which showed positive signs for the EUR.

Today we have a very busy day of data from both UK and US which could certainly move markets either way. This morning we have UK manufacturing, industrial production figures and UK NIESR GDP Estimate at 09.30 and then in the afternoon most importantly US Non-Farm Payrolls + Unemployment Rate at 13.30. If we see positive figures from the US, we can certainly see FED looking at another interest rate hike.