Daily currency report
Overview
Dollar gains seen after the better-than-expected non-farm payrolls report have evaporated. There are a couple of figures expected in the European session. PMI service sector survey, retail sales, and a consumer confidence index are expected to show the pace of the economic slowdown weakening somewhat, which could help lift the euro. Broader market risk appetite was slightly damaged in the session when PMI service sector figures were released in China showing growth at its slowest rate since August 2011. There is very little on agenda in the US. Focus will be on various policy meetings. The RBA could cut rates when they meet, which is weighing on the Aussie dollar at the moment.
Sterling
Sterling opens at the upper end of its recent range against the euro, while Cable remains near three-month highs. The highlight will be the BoE’s policy meeting. Expectations are for the central bank to leave its policy unchanged, particularly after better-than-expected PMI surveys.
US dollar
Non-farm payrolls data released were not only better than expected, but the revised data showed an additional 114,000 jobs were added for the prior months of March and February. The rate of unemployment fell to 7.5 per cent, just one percentage point away from the Federal Reserve target. The dollar moved higher, but was then unable to hold onto gains and opens within recently traded ranges.
Euro
The European Commission looks set to grant France and Spain more time to reach their deficit reduction goals. The decision taken by the Commission came after downward revisions to growth were made for the countries, whose economies are struggling from austerity measures. In terms of data, PMI service sector surveys will be released throughout the eurozone. A sentiment survey and retail sales figure are also due out. Basically the figures promise a negative result, but one that shows the pace of decline slowing somewhat. Should the data come out in line with expectations, it is possible to see some small gains for the euro.