Daily Currency Update

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UK and Eurozone PMI's the focus today

GBP - British Pound

Sterling slipped lower during Tuesday's trade as the Pandemic sweeping the globe continues to dominate currency moves. Cable moved from a day's high of 1.2466 down to 1.2360. GBP/EUR followed the same way, moving from a day's high of 1.1343 down to 1.1224. It’s been a light economic calendar for the UK since the start of the week so virus chat has been in the driving seat for the best part. With a ‘shocking’ 27% rise in the deaths due to the deadly virus, not to forget a 14% surge in the cases, the UK’s policymakers are struggling to justify their efforts in taming the pandemic. The UK Government is coming under increased pressure to implement even stricture measures for the lock-down as cases continue to raise.

Away from the global pandemic we get our first round of PMI’s for the UK today at 9.30am. Expected to show contraction and posting a number of 47.1 it will be one to watch and see how much of a miss this could be. The number will be for the month of March and given we only recently went into lock-down this forecast may not be far off.

Key Movers

This morning we have seen a raft of European releases. With the majority of them highlighting contraction, the standout release came from the Italian Manufacturing PMI. The headline figure is the weakest print since April 2009 with factory production falling at its fastest pace on record while operating conditions and order book volumes declined at their quickest rate for nearly 11 years. Another concern was the Eurozone’s PMI Manufacturing release. Output, new orders, and purchasing all fell sharply as supply-side disruptions continue to intensify amid the virus outbreak and lock-downs globally. Hitting a 7 and a half year low is a worry but the real concern is we haven’t even hit the peak decline and virus driven data doesn’t form the best part of this March release so this number is largely expected to decline further.

The US Dollar crept higher through trade on Tuesday, advancing against most major counterpart as investors adjusted end of month and quarter positions. The dollar closed the first three months of the year as the best performer among majors up some 2.8% while oil and commodity led currency were the biggest looser with the Norwegian Kroner leading pack, having lost almost a 5th of its value, a move directly in correlation with the tumbling oil price.

Expected Ranges

GBP/USD: 1.2280 - 1.2380 ▼

GBP/EUR: 1.1230 - 1.1320 ▲

GBP/AUD: 2.0250 - 2.0380 ▲

GBP/NZD: 2.0870 - 2.0990 ▲