The pound dropped against most of its major rivals before the release of labour market statistics today at 9:30. The ILO unemployment rate is expected to remain unchanged in February at 8%. However, jobless claims change is projected to contract by –3.0K in March after reaching –10.2K in February. Also scheduled for today is the February earnings release, with the expectations for the number to remain unaffected at 2.2%. Sterling dropped yesterday after inflation surprisingly slowed to 4.0% in March. CPI figure reassured Bank of England officials to maintain its loose interest rate policy. Expect for the pound to remain under pressure should we see the employment numbers surprise on the downside.
The euro gained across the board this morning after French inflation figures came out higher than expected. French CPI (Consumer Price Index) inflation rose by 2.2% on annual basis in March, beating the expectation of a 2.0% increase. Rising consumer prices have prompted the European Central Bank to implement its first interest rate increase since the start of the financial crisis, and it is widely expected for the ECB to act again in June. Looking ahead to today, Eurozone Industrial Production figures headline the economic calendar, with the expectations for the figure to improve in February. Expect for the single currency to remain supported against major rivals as the inflation figures back up ECB’s tightening policy.
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