europe union building

Europe strikes back

8th March 2018 Market Update

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?? GBP – Sterling enjoyed a decent finish to the day bouncing off a four month against the euro and enjoying a similar finish against the US dollar. The currency managed to shrug off disappointing house growth data, with Halifax reporting the lowest rate of increase since March 2013.

No data is due out from the UK today with focus now on Friday’s manufacturing and industrial production figures.

?? EUR – As mentioned above, Europe put pressure on Donald Trump and his steel tariffs by drawing up a list of US goods that could be hit with retaliatory tariff action. The goods include peanut butter, orange juice, bourbon, and cranberries, along with unspecified industrial and steel products. As a result, we saw the euro weaken over the course of the day.

On the data front the euro area expanded as estimated in Q4 at a rate of 2.7%.

Today’s focus will fall on the ECB interest rate decision as well as the accompanying rate statement. Should the ECB indicate to give up their accommodative policy on monetary easing, then we could well see the euro strengthen. But as always, any move on the currency will be dictated by the details in his speech.

?? USD – Away from the fear of trade wars, data from the US showed a very positive ADP jobs report, with businesses reporting an additional 235,000 private sector jobs in February. The data pushed the US dollar index marginally higher and the reading could provide an interesting insight into the all-important non-farm payroll print on Friday.

No major news out today but we could see some moves on the US dollar should Trump decide to weigh in again on the trade tariffs.


Key Announcements

?? EUR
12:45pm: ECB Interest Rate Decision
13:30pm: ECB Monetary Policy Statement


Summary: The saga of the trade wars continues with Europe threatening to retaliate over the US steel tariffs. The euro weakened as a result and the issue does seem to be the main concern on the markets with the US dollar and euro likely to be in the firing line.


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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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