Sterling struggled against the majors yesterday after the euro recovered on strong eurozone economic data and cable fell below the $1.54 handle versus the dollar. This was despite better than expected UK manufacturing data being released. Markets seemed to ignore this and focus on the euro-area, although todays UK data in the form of PMI Construction shouldn’t be ignored as much. A move to the upside of the expected number of 59.0 may lead sterling higher, although as we wait for BoE Governor Mark Carney so speak at 10.00, pound rates could be suppressed until then.
The single currency remained steady versus the pound this morning after upbeat German retail volumes data reflected that Germany’s shoppers spent more money in January. The EUR/GBP pair trades almost flat near fresh session highs of 1.3720 levels, moving away from fresh seven year lows posted at 1.3830 levels in the previous session. EUR/GBP rose to fresh session highs after positive results from Germany’s retail sector boosted the shared currency. This was on top of yesterdays impressive economic data in the form of CPI numbers and unemployment data, both coming in better than expected to boost the euro. On the other hand, upside in the cross remains restricted on the back of a solid recovery in the pound ahead of UK construction PMI later in the session.
The dollar slide against the majors yesterday as investors continued to pour into stocks to the detriment of the US currency. US stocks have hit record levels, with both the Dow Jones and the S&P 500 closing at all-time highs. The Dow Jones index gained 155.93 points to reach 18,288.63, while the S&P 500 rose 12.89 points to 2,117.39. For its part, the tech-heavy Nasdaq rose 44.57 points to 5,008.10 points, marking the first time since 10 March 2000 that it had closed above 5,000. The markets were buoyed by merger activity and China’s decision to cut interest rates over the weekend.