Dear Reader,

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

• Mixed mood on markets yesterday …
• The dollar remained under pressure …
• Sees EUR/USD open at the midpoint of $1.09-1.10 …
• GBP/USD is operating just below the $1.25 handle …
• EUR/GBP is in the top half of 87-88p …
• US non-manufacturing ISM (Mar) the main highlight today …

The latest AIB PMI data® pointed to a slight softening in the upturn across the Irish service sector during March amid moderations in rates of increase in activity and new business. The year-ahead outlook for output subsequently fell to its lowest level in three months and was below its long-run average

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.

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

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.