- Pound Sterling Slumps on Poor PMI – Services and Composite disappoint forecasts
- US Data Largely Positive on Wednesday – Non-Manufacturing ISM Beats Forecasts
- Commodity Stocks Appear to Rebound – Stocks in China boost risk-sentiment
- Forecast: US Jobless Claims Today – Unemployment Today, Non-Farm Payrolls Friday
Pound Sterling (GBP) Left Uninspired by Economic Fears
The Pound has been left largely unable to recover against major rivals such as the Euro and US Dollar after this week’s UK PMI releases revealed that the economy was reeling, with many claiming ‘Brexit’ worries are to blame.
Tuesday’s Manufacturing report came in with a contraction score of 49.2 and Wednesday’s Construction PMI disappointed with a low score of 52.0.
This week’s UK PMI session was rounded off by Services and Composite reports which were released this morning. As feared, both figures came in well below expectations. Services dropped from 53.7 to 53.5, with the Composite score falling from 53.6 to a low 51.9.
US Data Largely Positive, but US Dollar (USD) Recovery is Minimal
Wednesday’s session saw yet another slew of US data, with this set being largely positive. However, poor employment change data of only 156k disappointed estimates that March’s 200k would be nearly matched by 195k in April, which may have weighed on the ‘Greenback’ alongside this week’s previously poor data.
March’s final durable goods orders report printed as predicted at 0.8%. Optimistic data from yesterday includes the key ISM Non-Manufacturing report, which impressed with a high score of 55.7, improving from 54.5 and well beyond the forecast 54.8.
The US trade deficit narrowed more-than-expected, from -47.1b to -40.44b. April’s final Services and Composite PMI scored higher-than-expected at 52.8 and 52.4 respectively, and factory orders improved from a contraction of -1.7% to 1.1%.
Euro (EUR) Flat on Poor Retail Sales
Wednesday’s Eurozone retail sales reports did little to put a spark into the faltering Euro as investors continued to remain wary of the shared currency after warnings from the European Commission.
Growing by 0.3% in February and expected to contract -0.1% in March, retail sales instead contracted by a bearish -0.5%. The year-on-year print slowed from 2.7% all the way to 2.1%.
Eurozone data is largely quiet in Thursday, but European Central Bank (ECB) policymakers are due to speak at points in the day. According to Reuters, gradual economic recovery in the Eurozone is still expected to continue.
Australian Dollar (AUD) Attempts Recovery
Australian investors were hearted on Thursday as a new Reserve Bank of Australia (RBA) Governor was announced. Dr. Philip Lowe will be replacing Glenn Stevens, who had been the governor of the RBA since September 2006.
The GBP/AUD exchange rate lost around -80 pips on Thursday at the time of writing in response to some positive Australian data, including the latest trade deficit report which thinned from -3044m all the way to -2163m, well past -2900m estimates.
Retail sales also improved from 0.1% to 0.4%.
New Zealand Dollar (NZD) Buoyed by Improved Risk-Sentiment
The GBP/NZD exchange rate trended lower on Thursday as risk sentiment was improved by Australian news and a perceived positive rebound in commodity stocks.
According to the Economic Times, economist Mark Mobius has advised investors to purchase commodity stocks. He believes that commodity stocks are due an extreme upward rebound after an extended period of price drops; a movement which has begun to see an improvement in risk appetite.
Canadian Dollar (CAD) Strengthens on Oil Prices
The Pound to Canadian Dollar exchange rate has begun to slide again after the Pound’s rally against the ‘Loonie’ earlier this week.
A disastrous wildfire in Canada has severely hampered oil production, in turn increasing oil prices and therefore demand for the oil-correlated Canadian Dollar.
Investors are likely to watch ongoing developments with the wildfire crisis closely as it could cause long-term harm to businesses and consumer confidence. Key unemployment rate data is also due tomorrow.
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