What’s been happening?

GBP: Yesterday saw the UK Services PMI hit with a reading well below the market expectation. The figure came in at 51.7 which was far below the market expectation of 53.9. Although the sector is still showing expansion, it was once again attributed to the inclement weather experienced in March, much the same reason that was attributed to this week’s poor Construction PMI data. As a result, the pound was sold off against both the euro and the dollar and fell below the key psychological level of 1.40 for the first time since March 20th this year. The pound is on the back foot at present as investors now deem it unlikely that the BoE will move to increase interest rates in May as had been predicted.

EUR: The euro could be in for a rocky time ahead. Data from the eurozone has not been impressive of late and with German Factory orders missing expectation of a 1.6% increase, the pressure is mounting on the euro. Couple this with news out of Italy that they are edging ever closer to an anti-EU coalition being formed, and we have the recipe for potential euro weakness. The two parties in question causing all the noise in Italy are the left wing ‘Five Star’ movement ad the right wing ‘League.’ No Janet Jackson is not the front person of the Five Star movement, but there is sure to be a song and dance if the coalition is formed. Both parties are sure to want to have impact early on and carve out a clear direction for Italy which could come in the form of addressing the most significant issues that include living standards not improving and immigration. However, the lack of a working majority may hinder the amount the government can do to rectify these issues.

USD: The US Trade Deficit came out yesterday posting at $57.6 billion and was the largest shortfall since October 2008. The dollar retreated on this news overnight and all eyes will now be on the clout of Fed Chair Powell and Non-Farm this afternoon.

 What’s coming up?

USD: The one to watch today will be the Non-Farm Payrolls which is due out at 13:30 with the expectation of a 190K figure. Any move above 200K could trigger some dollar strength. We also have Fed Chair Powell speaking this afternoon.

 RoW

AUD was pressured overnight against the greenback as a relief rally across markets lifted the US share market. CAD has also rallied on the back of comments by the Canadian PM Trudeau who stated that NAFTA negotiations are moving forward in a ‘significant’ way.