Dear Reader,

 

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

  • Positive tone to investor sentiment yesterday
  • Reflected in gains for the main equity markets
  • Data-wise, US PPI data was softer than expected
  • This macro news was unhelpful to the dollar
  • Overall, euro retained its upward momentum
  • EUR/USD rose to a YTD high of $1.1075
  • EUR/GBP back above 88p
  • Busy US macro diary today, includes retail sales numbers for March
 
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Today's Opening FX Rates
 
      % Change
      Day* End 2021
EUR/USD 1.1065   0.70 3.39
EUR/GBP 0.8826   0.32 -0.20
GBP/USD 1.2536   0.39 3.63
GBP/EUR 1.1325   -0.32 0.20
*versus Previous Day's European Open

 
 
 
Weekly Market View
 

A Fine Margin

 

There was a welcome sharp fall in headline inflation in the Eurozone in March as the sharp jump in energy prices following the Russian invasion of Ukraine early last year started to drop out of the annual rate. Inflation fell to 6.9% from 8.5% in February and is now well below the peak level of 10.6% hit last October.
 
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Weekly Market Brief: 10-14 April
 
 

Reversal of Fortune

  • March has seen a welcome sharp fall in headline inflation in the Eurozone.
  • Wholesale energy prices have been in marked decline since last summer and are now below the levels that prevailed ahead of the Russian invasion of Ukraine
  • A recent excellent paper from the ECB (How tit-for-tat inflation can make everyone poorer) clearly demonstrates that soaring profit margins are mainly responsible for the marked pick-up in domestic inflation
 
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AIB Ireland Manufacturing PMI - March 2023
 

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.
 
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Forex and Interest Rate Outlook - March 2023
 
  • Economic data have generally surprised to the upside in first quarter, helped by easing inflation. However, possible credit crunch and tighter lending standards new risk to activity
  • Central banks continue to hike rates, but expectations of further increases scaled back greatly on signs of stresses in parts of banking system and associated turbulence on financial markets
 
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Find more Economic Analysis on the FX Centre
 
 
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