On a light economic calendar day, the just published Sentix survey results showed that investor sentiment in the Euro zone unexpectedly declined in March. In other economic news, German factory orders fell in January, suggesting that the largest economy of the Euro zone started the year on a strong foot. As the UK economic calendar remains empty today, investors will eye tomorrow’s report by the BRC that measures the change in the actual value of UK retail sales from participating companies.

Across the Atlantic, the Labour Market Conditions Index, due for release later today, will by eyed by investors to gauge the US Federal Reserve’s (Fed) take on the US labour market after Friday’s mixed reports on the jobs market.

Pound Sterling – UK Markets

The Pound is trading on a weaker footing against the greenback this morning. With no major economic releases scheduled in the UK, much of the trading direction in the Sterling - US Dollar currency pair will be dependent on the US Labour Market Conditions Index and Consumer Credit Change due later in the day. However, gains in the Pound under adverse economic releases in the US are likely to remain restrained amid persistent fears over the Brexit referendum scheduled to take place in June, as various key officials in the UK are heard to have conflicting interests.

The Pound traded higher against the greenback on Friday amid no major releases in the UK. Meanwhile, a sharp rise in the US non-farm payrolls and an unchanged unemployment rate, at an almost eight-year low for February, failed to hold gains in the US Dollar as a slight decline in the US hourly wage growth weighed on the currency. Going forward, investors will eye tomorrow’s BRC retail sales monitor for further direction in the Pound - US Dollar currency pair.

US Dollar – US Markets

The US Dollar traded lower against the shared currency and the Pound on Friday, after a government report indicated that wage growth in the US dropped into negative territory after remaining at or above the zero level for thirteen consecutive months, raising concerns about the strength of the US economy. However, the number of new job creations in the US economy came in substantially higher than the market estimation for February, signalling that the US labour market gained momentum after slightly weaker numbers in the previous month. The healthcare, retail and bar and restaurant sectors led job gains, while the mining sector continued to lose jobs. Additionally, the US unemployment rate remained unchanged for February at its lowest level since 2008.

Going forward, investor focus will be on a couple of speeches by Fed officials for insights on future actions of the US central bank ahead of this month’s monetary policy meeting. On the macroeconomic front, today’s Labour Market Conditions Index will be eyed by investors to gauge the health of the labour market in recent months.

Euro – European Markets

The Euro is trading lower against the US Dollar this morning after the release of German factory orders data which indicated that the contracts for ‘Made in Germany’ goods dipped for a second consecutive month in January. The fall was partly attributed to weak domestic demand, hinting that the nation’s economic growth might be faltering. However, the largest Euro zone economy’s competitiveness led to a strong foreign demand that helped the fall in factory orders to remain well below market expectations. Meanwhile, the just out data showed that sentiment in the Euro area reported by Sentix has unexpectedly deteriorated for a fourth consecutive month in March. Today’s soft data adds to the speculation that the European Central Bank, at its policy meeting later in the week, might announce a large stimulus package in an attempt to boost the economy.

On Friday, the common currency traded higher against the greenback after data showed that Italy’s economy continued to expand in the fourth quarter and in line with market expectations.

Other Currencies – Highlights

The Aussie Dollar is trading on a weaker footing against the US Dollar today, after a report by the Australian Industry Group and the Housing Industry Association indicated that the construction sector continued to contract for a third consecutive month and at a faster pace in February, leading to slowest house building activity in more than a year. Additionally, a disappointing economic growth outlook for its largest trading partner, China, weighed on the local currency. The world’s second largest economy stated that it has lowered its economic growth outlook for the next five years as it plans to create jobs and restructure its economy amid waning global trade and unstable financial markets.

Going forward, investors will eye a speech by Reserve Bank of Australia’s Deputy Governor, Philip Lowe, which might be aimed at providing inputs that could take some steam out of the Aussie Dollar. Elsewhere, on tab will be today’s US Labour Market Conditions Index for further direction.