Pound struggled yesterday after some poor Eco Stat readings

6 April, 2018

Simon Eastman

After a quiet start to the trading month, we saw the pound struggle yesterday after some poor eco stat readings.

We saw Markit services PMI figures released across Europe and the UK in the morning which all came out lower than expected, with the UK dropping to 51.7 from 54, showing the lowest level of services activity in 20 months. Germany dropped from 54.2 to 53.9 also showing a slowdown, but the fact they missed out on expectations by such a small amount gave investors the urge to back the euro rather than the pound in early trade as we saw the rates trickle down by half a cent. After lunch, the US markets opened with some jobs data ahead of the all-important non-farm payrolls this afternoon. The continuing jobless claims reading was better than expected to give the dollar a boost in the afternoon, taking a cent off sterling and over half a cent off the euro, taking into account the deceleration in EU services. Staying in North America, against the Loonie, the pound also lost a cent despite Canadian trade data coming out lower than expected.

Today is another quiet day for UK data with nothing to report apart from a speech in the afternoon by Mark Carney the Bank of England governor at 4.15pm. All markets will be awaiting the non-farm payroll, unemployment and average earnings figures form the States at 1.30pm, while those looking to send money to Canada should also note the Canadian unemployment rate, also released at 1.30pm. As the week closes there is a speech by Fed chair Jerome Powell, his first time before the House Financial Services Committee at 6 pm.