Pound Rises Amid Risk Appetite
March 10 2017 - 12:30AM
RTTF2
The British pound strengthened against the other major
currencies in the early European session on Friday, as investors
await the all-important U.S. non-farm payrolls report due later in
the day for clues into the timing of any further rate
increases.
After a blockbuster private-sector jobs report earlier this
week, the official report from the Labor Department is expected to
show that employment increased by about 195,000 jobs in February,
down compared to January's 227,000. The unemployment rate is
expected to dip to 4.7 percent from 4.8 percent..
The U.K.'s FTSE 100 index is currently up 0.45 percent or 32.77
points at 7,347, France's CAC 40 index is up 0.57 percent or 28.25
points at 5,009 and Germany's DAX is up 0.55 percent or 65.37
points at 12,043.
Meanwhile, traders priced in a 25 bps rate hike at the Fed's
March 14-15 meeting and a Republican U.S. health plan to overall
the healthcare system cleared its first hurdles in Congress on
Thursday.
Upbeat comments by European Central Bank President Mario Draghi
on the economy and inflation spurred optimism about the economic
outlook. While pledging to keep the bank's aggressive stimulus
policy at least until the end of the year, Draghi on Thursday said
the risks of deflation have "largely disappeared'' and the
inflation outlook has improved.
In other economic news, data from the Office for National
Statistics showed that U.K. industrial production decreased for the
first time in three months in January. Industrial output slid 0.4
percent in January from December, when it grew 0.9 percent. Output
was forecast to fall 0.5 percent. This was the first decrease since
October.
On a yearly basis, growth in industrial output eased to 3.2
percent in January, in line with expectations, from 4.3 percent in
December. Manufacturing output grew 2.7 percent annually, following
a 4.2 percent rise in December. Economists had forecast a 2.9
percent increase.
Another report from ONS showed that construction output fell by
0.4 percent compared with December. However, output grew on a three
month on three month basis by 1.8 percent.
Also, the U.K. visible trade deficit remained broadly unchanged
in January. The deficit on trade in goods, came in at GBP 10.83
billion versus GBP 10.91 billion in December.
In the Asian session today, the pound held steady against its
major rivals.
In the European trading, the pound rose to a 1-week high of
140.48 against the yen, from an early low of 139.65. The pound may
test resistance around the 142.00 region.
Against the U.S. dollar, the pound advanced to 1.2174 from an
early low of 1.2150. The pound is likely to find resistance around
the 1.23 region.
The pound edged up to 1.2324 against the Swiss franc, from an
early near 2-month low of 1.2288. If the pound extends its uptrend,
it is likely to find resistance around 1.26 against the franc.
Meanwhile, the pound fell to more than 1-1/2-month low of 0.8731
against the euro, from an early high of 0.8691. The pound may test
support near the 0.88 region.
Looking ahead, Canada and U.S. jobs data for February and U.S.
Baker Hughes rig count data are set to be announced in the New York
session.
At 2:00 pm ET, U.S. Federal Reserve monthly budget balance
statement is set to be published.
Sterling vs Yen (FX:GBPJPY)
Forex Chart
From Feb 2024 to Mar 2024
Sterling vs Yen (FX:GBPJPY)
Forex Chart
From Mar 2023 to Mar 2024