Forex Market Review – GBPUSD hits 4-1/2 high after UK manufacturing PMI

Important: This page is part of archived content and may be outdated.

EURUSD kept within the range set since Friday, pushing up a couple of pips higher to 1.3378 and supported above 1.3314. Euro is vulnerable due to weak data which showed euro-zone manufacturing activity shrank in March and the region’s unemployment rate rose to a record high. Should U.S. PMI data due later, come in better than expected and boost the dollar, EURUSD could drift lower.

Sterling jumped to a new 4-1/2 month high against the dollar after better-than-expected U.K. manufacturing PMI.The March PMI survey came in at a ten-month high of 52.1, which beat forecasts of a 50.7. GBPUSD jumped to 1.6062, the highest since November 14.

The Swiss franc moved off early session highs when it was lifted following strong Swiss March PMI of 51.1, the highest since August 2011. Retail sales were lower than expected though. USDCHF was brought down to a one-month low of 0.9000 after the data but then bounced to 0.9043, ahead of U.S. PMI data due later, expected to show manufacturing activity in the U.S. picked up in March .

Yen pared early losses, as the boost in risk appetite from surprisingly strong Chinese factory data faded and safe haven demand is flowing back to the Japanese currency. USDJPY fell to 82.44 in European trading versus the Asian high of 83.29. EURJPY extended losses to 109.88 from an earlier high of 111.12.

The Australian dollar fell against the U.S. dollar, giving back gains made right after the improved China PMI which lifted the commodity-linked aussie due to close trading ties to China. AUDUSD hit a high of 1.0451 in Asian trading and declined since then to 1.0365. Investors are being cautious ahead of key data tomorrow. The Reserve Bank of Australia is holding its policy meeting and will announce interest rates.