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Pound pushes higher, fears of unrest in Italy weaken euro

business-articlesPound pushes higher, fears of unrest in Italy weaken euro
  • Pound benefits from end of quarter flows
  • Euro struggles as Italy remains in the spotlight
  • Safe-haven demand continues to fuel US dollar gains
 
 
Pound edges higher before final PMIs
 
On Tuesday the pound benefited from the publication of some better-than-forecast business investment figures for 2019 and end of quarter flows.
 
Sterling could reverse its tentative gains today however following the publication of the UK’s finalised manufacturing PMI.
 
There’s a good chance GBP investors will see the UK’s factory PMI revised down as the final release will also cover the period since the UK government imposed a countrywide lockdown.
 
Reports of civil unrest in Italy weaken euro
 
The euro fell during yesterday’s session in response to concerns of potential civil unrest in the south of Italy.

This comes as authorities began deploying police to the streets of Sicily amid worries over potential looting or rioting after a ferry service carrying food and medicine was halted when the ferry company hit financial trouble.

Further limiting the appeal of the euro was the Eurozone's consumer price index, as inflation slowed by more-than-expected last month.

The Eurozone’s finalised PMI figures are unlikely to inspire much confidence in the bloc’s manufacturing sector as they are expected to confirm factory growth slumped to a seven-year low in March.
 
 
US dollar supported by risk aversion
 
The US dollar trended higher through most of yesterday’s trading session amid ongoing coronavirus uncertainty.

However, these gains were trimmed later in the session after Donald Trump held a press conference in which he warned the US faces a ‘very tough two weeks’, with the White House warning up to 240,000 Americans could die from the coronavirus.

The ISM manufacturing PMI may dent the US dollar this afternoon if domestic factory growth is shown to have shrunk by more-than-expected last month.
 
 
Upcoming Data:
 
Wednesday, 1st April 2020
09:00 EUR Eurozone Unemployment Rate
13:30 CAD Manufacturing PMI
14:00 USD ISM Manufacturing Index
 
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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