In the UK, the headline PMI number remained at around a 34-month low in March and suggested that activity in the nation’s manufacturing sector had not picked up significantly in March, raising fears that UK economic growth may cool significantly in the first quarter after showing a slight expansion in the previous quarter.

In Europe, the final survey results indicated that the activity in the Euro zone’s manufacturing sector slightly picked up in March. Separately, manufacturing activity in Germany, the largest economy of the Euro zone, continued to expand at a faster than expected pace, while for France it continued to contract at an unchanged pace. Going forward, investors will eye another set of manufacturing activity growth data, scheduled in the US later today. Also on tab will be nonfarm payrolls and the unemployment rate data in the US.

Pound Sterling – UK Markets

The Pound has lost ground against the US Dollar and the single currency this morning, after the just published data showed that manufacturing activity in the UK missed market expectations in March, as the global economic slowdown weighed on the nation’s exports. This weakness might highlight concerns about the sustainability of the UK’s economic expansion. The dismal manufacturing data followed last week’s CBI Industrial Trends Survey which showed that the performance of the UK's manufacturing sector was bleak due to a slowdown in demand for the domestic economy as well as emerging economies. Earlier today, a report by Nationwide showed that house prices in the UK climbed at their fastest annual pace in a year last month, suggesting that the second home and buy-to-let investors have rushed to purchase homes, ahead of the introduction of a new stamp duty tax.

In the upcoming week, investors will eye the UK’s construction PMI data along with the BRC retail sales data, scheduled at the start of the week, for further direction in the Pound against its key currency peers.

US Dollar – US Markets

The US Dollar is trading mixed against its key currency counterparts this morning, ahead of today’s crucial nonfarm payrolls data for March. Data is anticipated to show an increase of just over 200K, with no change expected in the unemployment rate. Investors are also projecting a rebound in monthly average hourly earnings, which slipped in February despite an overall improvement in the nation’s labour market. Today’s data will play a key role in determining the US Federal Reserve’s stance on interest rates at its meeting later this month. In a busy economic calendar day, market participants will keenly monitor a slew of macro releases including the ISM’s manufacturing PMI data for March.

The US Dollar hit a 5-month low against the Euro in overnight trading, as dovish comments from the Fed’s Chairwoman, Janet Yellen, continued to weigh on the currency. Yesterday, the US Labour Department’s report showed that the number of workers for new unemployment benefits rose last week, but remained below a level associated with an improving labour market. Meanwhile, the Chicago Business Barometer rose in March, as firms increased production and hiring.

Euro – European Markets

The common currency is trading firmer against its key currency counterparts this morning after the release of better than expected Markit’s manufacturing activity data in the Euro zone and in its peripheries. The manufacturing sector continued to expand for the Euro area and in most of its economies, with the final prints for the Euro zone and Germany coming in above their earlier estimates. Moving ahead, investor focus will be on today’s unemployment rate data for the Euro zone which is anticipated to remain unchanged from the previous month at its lowest level since November 2011. In the week ahead, investors will eye a slew of economic releases in the Euro region for further direction in the Euro against its key peers.

Yesterday, the first print of the inflation data showed that consumer prices in the Euro zone slightly improved in March from the previous month but continued to remain in the deflationary zone for a second straight month. This was due to weaker energy prices that dragged down the cost of goods for consumers and businesses.

Other Currencies – Highlights

The Swiss Franc was unchanged against the greenback earlier in the day after a report by the government indicated that the nation’s retail sales unexpectedly dropped in March following a rebound in the previous month. This data came in contrary to this week’s upbeat reading of the UBS consumption data which rose from the earlier month due to consistent and solid growth in private consumption. Meanwhile, recent weakness in the greenback continued to hold the local currency higher despite downbeat retail sales data. However, separate data showed that manufacturing activity in Switzerland surprisingly picked up pace for a third consecutive month.

Later today, trading in the US Dollar - Swiss Franc currency pair will be influenced by a string of economic releases in the US such as the ISM manufacturing PMI, unemployment rate and nonfarm payrolls data which will attract significant market attention.