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Tuesday 6th April - Today’s Rates & Market News

Published: 06 Apr 2021

Markets

GDP

The cable tipped back under 1.3900 after earlier pegging an 18-day high at 1.3920. The pound yesterday printed a 14-month high versus the euro, which although occurring in holiday-thinned trading reflects the contrasting fortunes of the reopening UK economy with the re-restricted economies across the Channel. The rate of new Covid cases now 4% of what it was at the peak seen in early January, despite a more than doubling in testing over that time, while the death rate is less than 3% of what it was at the highs. A 10-year high in the final March manufacturing PMI (data released last Thursday) was an endorsement of sorts for Brexit, being achieved despite the increased trade friction that has been caused between the UK and EU because of Brexit. The two sides last week reached a post-Brexit Memorandum of Understanding (MOU) on financial regulation, which had been widely anticipated. The MOU will help to lay out a framework for cooperation on regulations and a forum for discussing rules, procedures, and information sharing. The UK data calendar this week is quiet. The main highlight will be the final releases of the March services and construction PMI surveys (due Wednesday and Thursday, respectively). Market participants will be factoring upside risk following the unexpected upward revision of the final manufacturing PMI report, which came in at a 10-year-plus high of 58.9 in the headline reading. The median forecast for the final services PMI is 56.8, and 56.6 for the composite reading.

 

World

The dollar has found its feet after taking a tumble in thin markets yesterday. The bullish case for the dollar remains strong, given the outsized fiscal stimulus coursing through the U.S. economy alongside the relatively advanced states of Covid vaccination progress in the U.S. and the likelihood for further widening in the U.S. Treasury yield differential versus peers. The March jobs report was a blowout, while the ISM services index surged to a record peak. Wall Street also scaled to new record highs yesterday. The only blot on the bullish dollar landscape is the uber accommodative stance of the Fed, which has been downplaying the scope for runaway inflation risks, although the relatively high Treasury yields, among low- and sub-zero yielding peers, will offset this. The DXY dollar index has lifted to the upper 92.0s after yesterday posting a 12-day low at 92.52. EUR-USD has concurrently tested the waters below 1.1800 after making a 12-day peak at 1.1820. USD-JPY has lifted back above 110.00. AUD-USD has dropped back from one-week highs, while Cable has tipped back under 1.3900 after earlier pegging an 18-day high at 1.3920. The pound yesterday printed a 14-month high versus the euro, which although occurring in holiday-thinned trading reflects the contrasting fortunes of the reopening UK economy with the re-restricted economies across the Channel. The rate of new Covid cases now 4% of what it was at the peak seen in early January, despite a more than doubling in testing over that time, while the death rate is less than 3% of what it was at the highs. In data today, Chinese services PMI came on the strong side, at three-month highs, as did China's composite PMI reading. Beijing has made clear that it will be trimming lending, which has caused some investor indigestion, though it reflects policymakers' confidence in the outlook. The RBA left policy settings unchanged following its April policy review while pledging ongoing accommodation. The central bank still cautioned about the side-effect of its policy fuelling a potential house price bubble.

 

XE Market Analysis Europe – 06th April 2021

 

 

Today’s Rates

GBP>EUR – 1.1736

GBP>USD – 1.3856

EUR>USD – 1.1802

GBP>CAD – 1.7380

GBP>AUD – 1.8167

GBP>SEK – 12.070

GBP>AED – 5.0881

GBP>HKD – 10.755

GBP>ZAR – 20.194

GBP>CHF – 1.3005

 

Today’s Calendar 

·        EUR       Unemployment(Jan)

·        EUR       Unemployment Rate(Feb)

·        AUD       Commonwealth Bank Services PMI(Mar)

·        AUD       AiG Performance of Construction Index(Mar)

 

 

 

Today’s Highlights

  • EUR/USD: Recent recovery seems short-lived until Europe ramps up its vaccination effort
  • GBP/USD recaptures 1.39 amid the UK easing optimism
  • Forex Today: Dollar retreats with yields, markets wary of Chinese cooling, US stimulus news eyed
  • AUD/USD slides to fresh session lows, still comfortable above 0.7600 mark

(https://frank-exchange.com/)

 

 

This document has been prepared solely for information and is not intended as an Inducement concerning the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited/Manor House Foreign eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result.  Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.

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John Hall

Firm: Frank eXchange
Country: United Kingdom - England - England

Practice Area: Foreign Exchange

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