Major Currency Pairs: Pound Slides Against Dollar
ICM Brokers | Mar 04, 2014 05:10AM ET
EUR/USD
The euro slumped against the dollar on Monday after an upbeat report on U.S. consumer spending sparked healthy demand for the greenback. The Commerce Department reported earlier that personal spending rose 0.4% in January, above expectations for an increase of 0.1%. Personal spending for December was revised down to a 0.1% gain from a previously reported increase of 0.4%. The report added that personal income rose 0.3%, beating expectations for a 0.2% increase, after a flat reading in December. The euro, meanwhile, came under pressure as escalating tensions over the crisis in the Ukraine sparked a broad-based selloff in risk assets. In the euro zone, data on Monday confirmed that the region’s manufacturing purchasing managers’ index declined to 53.2 in February from 54.0 in January. It was the first dip in five months, highlighting the fragile nature of the recovery in the euro area. The rate of decline in France’s manufacturing sector eased in February, while activity in Germany’s manufacturing sector rose for the eighth straight month.
GBP/USD
The pound slid against the dollar on Monday after upbeat data on U.S. factory and consumer spending kept expectations firm that monetary stimulus measures will continue scaling back as the year unfolds. The dollar also saw support after the Institute for Supply Management revealed that its manufacturing purchasing managers’ index rose to 53.2 last month from 51.3 in January, beating forecasts for a reading of 52.0. The report attributed the rise to an increase in new orders after rough winter weather disrupted commerce at the start of the year. The dollar also rose on escalating tensions over the crisis in the Ukraine, which sparked demand for safe-haven greenback positions. Russian President Vladimir Putin over the weekend sent troops into the Crimea region. –Meanwhile in the U.K., data revealed that a strong upswing taking place in the U.K. manufacturing sector continued in February, with jobs growth in the sector accelerating to a 33-month high. The Markit U.K. manufacturing purchasing managers’ index for February came in at 56.9, up from a revised 56.6 in January. While the forecasts are about to tick down to 56.5.
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USD/JPY
The dollar and the yen remained stronger on Monday as concerns over the unfolding crisis in Ukraine fuelled safe haven demand, while data showing that U.S. manufacturing activity beat forecasts in February also boosted the dollar. Dollar, yen remain higher with focus on Ukraine Dollar and yen remain stronger amid increased safe haven demand The report attributed the rise to an increase in new orders after bad weather caused disruption at the start of the year.
USD/CAD
Canadian dollar recorded another loss against the U.S. dollar counterpart on Monday, after the release of positive U.S. personal spending data and as concerns over tensions between Ukraine and Russia continued to support safe haven demand. In Canada, data showed that the raw materials purchase price index increased by 2.6% in January, blowing past expectations for a 1% gain. The raw material price index rose by 1.8% in December, whose figure was revised from a previously reported increase of 1.9% decline. Meanwhile, market sentiment remained under pressure amid tensions over the unfolding crisis in the Ukraine sparked a broad based selloff in risk assets, following Russian President Vladimir Putin’s decision to send troops into the Crimea region over the weekend.
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