US consumer confidence declines
Wednesday 1 March, 2023
Daily Currency UpdateMacroeconomic data was thin on the ground yesterday. US consumer confidence unexpectedly declined in February, as rising prices and deepening concerns about the outlook outweighed the near-term strength of the labour market. The index fell from the 106 January reading and below the forecast of 108.5 to 102.9. The news took GBP/USD down from the highs of 1.2140 to 1.2010 overnight, but a recovery has been seen ahead of today’s session. GBP/EUR has also fallen overnight. Sterling gains were seen after a post-Brexit trade deal was struck regarding the rules for Northern Ireland, as tensions eased on the land border between UK and Europe. Inflation data early on Tuesday from both France and Spain also supported gains with both countries coming in higher than expected. GBP/EUR touched 1.1420 late afternoons but has since been on the decline. Governor Bailey is due to speak at the Cost of Living Crisis Conference, in London this morning. Market participants will be listening intently for any comments that may offer interest rate clues. US ISM manufacturing PMI is this afternoon where an increase to the previous month’s 47.4 is expected – 47.9 forecast. There are also a few low-impact data releases from each of the reasons that will also be worth keeping an eye on. Data should drive volatility over the next 24 hours for each of the GBP, USD, and EUR currency crosses.
Key MoversMarkets seem to be at risk on this morning after China's manufacturing activity expanded at the fastest pace in more than a decade in February. The recovery in the world’s second-largest economy seems to be gaining momentum after the relaxing of its anti-COVID restrictions. Manufacturing Purchasing Managers’ Index rose to 52.6 in February, data showed overnight, a jump from January’s figure of 50.1. China’s non-manufacturing PMI fared even better, rising to 56.3 in February, well above the prior month’s reading of 54.4. The news has supported a sell-off in the USD, as people seek riskier assets during less risky times, and has benefitted the EUR and AUD. EUR/USD has picked back up to 1.0650 after touching 1.0560 overnight and AUD/USD has touched 0.6770 in the past few hours after being as low as 0.6700 yesterday.
- GBP/USD: 1.2010 - 1.2140 ▲
- GBP/EUR: 1.1280 - 1.1390 ▼
- GBP/AUD: 1.7740 - 1.7930 ▲
- EUR/USD: 1.0580 - 1.0710 ▲