Quiet start to month as USD data release is against trend

Yesterday saw a fairly quiet start to the month with relatively little movement seen particular in the majors, GBP, USD and EUR. Low key Eurostats did little in the morning to move Euro rates which remained relatively stagnant – GBP/EUR traded within around a 20pip range. Interestingly a morning release from the UK showing an increase in manufacturing output also caused barely any shift, which is no doubt unwelcome news for any Euro buyers given the recent drop in exchange rates. In the afternoon the lack of movement changed however as the focus moved to the US who released unemployment and manufacturing PMI data.

It was a surprise for the Dollar, having made considerable gains recently that these stats came in under expectation, with the headline manufacturing figure coming in at 50.2 down from a predicted 50.6. As such it lost ground, but given its recent gains and the current market sentiment these losses were not as great as might normally be expected. By the end of the day’s trading, USD had lost around 0.5 of a cent against GBP and around the same against EUR. The effect of this weak USD then acted in the afternoon as a catalyst to EUR against GBP which gained half a cent against the pound by the end of the day.

Today the focus will largely remain on the greenback which once again will play a large part in GBP/EUR rates. In the morning we have some fairly low key releases from the UK and Europe – PMI construction data and Producer Price Index stats respectively. But the main news of the day comes from across the Atlantic as the unemployment rate and non-farms payroll data is released in the afternoon.

Further poor data here, aside from its effect on USD pairings could see further gains for the single currency against the pound – bad news for any of you holding out for a recovery in rates. So should you have any upcoming transfers to make, particularly those involving GBP, EUR, or USD do let your Currency Index broker know today who can keep you informed of any movements which may affect your purchase. With the market currently so volatile, you don’t want to be caught out by and major swings in rates.