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Manufacturing strengthens dollar

3rd October 2017 Market Update

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🇬🇧 GBP – Manufacturing data came in below expectations yesterday at 55.9. This had minimal impact on the markets. Wednesday’s services PMI will probably have a more significant impact. Today construction PMI is being released at 9.30am, and is expected to come in line with the previous reading of 51.1.

🇪🇺 EUR – A large amount of manufacturing data was released from the Eurozone yesterday. This came roughly in line with expectations, therefore not moving the markets. The euro strengthened against the pound throughout the day, gaining roughly 0.5%. ECB executive board member Praet yesterday stated that the “risk of deflation has now disappeared”. This is despite inflation being subdued in Europe.

This morning Spanish employment figures came in below expectations, however this has not impacted the euro. Today no payments will be going to Germany due to the observance of German Unity day.

🇺🇸 USD – The US dollar gained around 0.6% against the euro and gained over 1% against the pound following a strong ISM manufacturing data reading of 60.8. The strong reading provides further fuel to the hawks in the Federal Reserve. Today there is no data of significance being released from the US.

 

Key Announcements

🇬🇧 GBP
09.30am – PMI Construction (Sep)

🇺🇸 USD
13:30pm – FOMC Member Powell Speaks

 

Our View: The US dollar has maintained its recent momentum following strong manufacturing figures yesterday. Today’s construction data from the UK is the only significant piece of data being released, however this might have minimal impact on the exchange rates. There will be no payments going to China and Germany today due to bank holidays.

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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