Dear Reader,

Here is an overview of today's economic news and market action:

• Quiet start to the week on financial markets …
• Currency-wise, the dollar was under some modest downward pressure …
• This sees EUR/USD open this morning just below $1.0 9…
• GBP/USD is up at the $1.24 mark …
• EUR/GBP remains in the top half of the 87-88p range …
• There are a number of second tier data releases due today …

Interest rates have been a key driver of currency markets in the past couple of years. The dollar was in the ascendancy from mid-2021 through to autumn 2022, as a rapid pace of increase in US interest rates, and rising US bond yields drove the currency higher.

Reversal of Fortune

• Interest rates have been a key driver of currency markets in the past couple of years.
• More recently, most of the major currency pairs have been relatively range bound, despite significant volatility on financial markets.
• While the dollar is now well below the 20-year highs hit last September, it still remains at elevated levels

Ireland’s manufacturing sector crept back into contraction territory in March. Intakes of new orders and manufacturing production both decreased on the month following some tentative signs of improvement in February and consequently, firms scaled back input purchasing further.

The March meeting of the ECB’s Governing Council saw the central bank raise rates by 50bps, which brings the key deposit rate up to 3%. 

BoE hikes by 25bps, and retains a tightening bias

The March meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank announce a 25bps rate hike. The voting breakdown showed that the MPC continued to be split on its rate decision.