Pound News: GBP Mixed as Manufacturing PMI Betters Forecast
The Pound rose against the Euro today but struggled against many of its peers as concerns rose over new signs of the Brazilian variant of Covid-19 circulating through the UK.
Today also saw the release of the UK Markit Manufacturing PMI for February, which beat forecasts and rose to 55.1.
Rob Dobson, Director at HIS Markit, was, however, concerned about stalling exports and supply-chain issues from Covid-19 lockdown restrictions. Dobson said: ‘[T]he survey reveals near-stagnant production, widespread shipping and port delays and confusion following the end of the Brexit transition period.’
UK Covid-19 developments will continue to drive the Pound exchange rate this week. But the main catalyst of movement will likely be the UK’s budget on Wednesday where Chancellor Rishi Sunak will could outline fiscal stimulus support for the UK economy.
Euro News: Could the Euro Claw Back its Losses on Strong German Retail Data?
Demand for the Euro has been mixed over the past few weeks, and continued to weaken today, with EUR investors becoming concerned over the EU’s relatively slow rollout of Covid-19 vaccines compared to the UK.
However, the outlook for the Eurozone’s economy improved in February, following today’s release of the latest Eurozone manufacturing PMI, which beat forecasts, rising from 57.7 to 57.9 and indicating solid growth.
Tomorrow will see the release of the latest German retail sales data for January. Any improvement in the outlook for the Eurozone’s largest economy would be EUR-positive.
US Dollar News: USD Sinks as Risk-On Mood Improves on US Stimulus Optimism
The US Dollar struggled today following President Joe Biden’s $1.9 trillion Covid-19 stimulus plan winning support from the House of Representatives. Demand for the safe-haven currency has been compromised by growing confidence in the global economy.
Coming up, today will see the release of the latest US ISM Manufacturing data for February. Any signs of improvement in the US economy could further dampen demand for the safe-haven ‘Greenback’.
Looking ahead, speculation around Joe Biden’s enormous Covid-19 relief package will continue to influence US Dollar exchange rate. If it looks likely that it will succeed, then demand for the USD will continue to suffer.
Canadian Dollar News: CAD Gains on Improving Market Mood
The Canadian Dollar made gains today amid risk-on trade even as oil prices continued to slip.
CAD traders are also eyeing Canada’s plans of a C$100 billion stimulus plan. However, fears over Canada’s debt are limiting confidence in the plan.
Stephen Brown, senior Canada economist at Capital Economics, said:
’There would be some reasons to be concerned about Canada’s long-term economic potential if the government did not pivot toward a more investment-focused program.’
Australian Dollar News: Risk-On Markets Buoy ‘Aussie’
The Australian Dollar rose against many of its peers today as risk-on market mood buoys demand for the risk-sensitive ‘Aussie’.
Looking ahead, AUD exchange rates could come under some pressure later if the Reserve Bank of Australia (RBA) maintains a dovish outlook at its March policy meeting.