29/03 – BoE envisage brighter growth outlook

GBP: BoE optimistic over growth

EUR: German business sentiment highest since June 2019

USD: All important job figures focus this week

GBP

Sterling was boosted on Friday after BoE member Michael Saunders commented that the current economic growth outlook is brighter than the central bank thought in February. Saunders also mentioned that the Bank envisages restrictions across the UK will be eased more rapidly than they assumed in February’s monetary policy report.

As a result, the pound had another attempt at breaching March’s high, albeit without success, but remains near the one-year highs. Against the US dollar the pound also managed to bounce off its one-month low.

This week, focus will be on Wednesday’s fourth-quarter GDP figures and manufacturing PMIs on Thursday.

EUR

After a torrid week for the euro, the single-bloc currency managed to stop further losses on Friday after the announcement that Germany’s Ifo index for business climate rose in March to the highest level seen since June 2019. This mirrors the strength in the latest manufacturing PMI survey.

Wednesday sees the release of the area’s inflation figures and then on Thursday we’ll also have the latest manufacturing PMI figures.

USD

The US dollar enjoyed a very good week despite finishing the week marginally lower. Measured against a basket of currencies, the dollar is now at its strongest level since November 2020 with further direction likely to be dictated by job figures that are due for release on Friday.

Friday’s non-farm payroll print is expected to show an additional 500,000 jobs were added in March – up from 379,000 in February. As well as this, the unemployment rate is forecasted to drop from 6.2% to 6.1%.

Market rates

Today’s interbank rates at 09:35 against sterling. Movement vs yesterday.

Euro€1.174 ↑
US dollar$1.382 ↑
Australian dollar$1.811 ↑
South African randR20.75 ↑
Japanese yen¥151.5 ↑

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Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.