Pre Easter Weekend Report
As we alluded to earlier on in the week, the US dollar continued to move up against the Japanese Yen today. It hit a seventh month high pushed on by a wave of favourable US data. Japanese investors flocked overseaes to invest funds into higher-yielding currencies at the beginning of their fiscal year.
Data reports on the U.S. manufacturing sector suggested that activity increased by its fastest rate in over 5 years. There was some bad news- a small increase in unemployment, but not enough to throw the dollar´s move into reverse.
The U.S. payrolls report is out on Friday, with predictions from the financial sages of 190,000 more jobs created in March. That would likely fuel the dollar higher and strengthen the case for higher U.S. interest rates.
There was also good news from over The Pond with strong manufacturing data from Europe. So the dollar didn´t move against everything and was indeed checked by the pound and the CA $.
Asia also reported some good manufacturing data in China.
EURO STILL BEING BATTERED VS STERLING, Dollar But Cimbs against Yen.
The euro was down at $1.3502 EUR, as analysts continued to worry about the debt situation in Greece.
The euro was up against the Yen as investors looked for higher returns on their money overseas.
Sterling hit a 5-week high against the euro (89.04 pence EUR/GBP), with the Tories pulling ahead in the polls for this year´s election, meaning political uncertainty is diminishing and the UK government should be able to act fast to get its debt down.
The pound rose against the dollar.
And good news on the Swiss purchasing managers’ index (The SVME Purchasing Managers’ Index -PMI) helped the Swiss franc move to 1.4151 per euro, its best rate since the euro was launched in 1999.
We expect the dollar to continue strengthening against the Euro, and there are some positive signs coming from the UK pound aswell. But don´t forget that they have a rather large collective credit card bill and the days of 0% transfers onto a new MBNA card are over!
The Yen looks shaky, but at some stage it will bounce back as we move away from the start of the Japanese fiscal year. Whether it will be a "dead cat" bounce though, time will tell.
