GBP Under Pressure With Hung Parliament Fear

By Pete Southern in Currency Articles | April 2, 2015 11:37 |

Fears that the upcoming UK general election could result in a hung parliament put the Pound under pressure on Wednesday and the British asset softened against the majority of its currency counterparts. Not even an upbeat UK Markit Manufacturing PMI was enough to help Sterling and the GBP/EUR pairing fell back below 1.38. This morning’s UK Construction PMI could help the Pound reverse declines if it shows an unexpected increase.

Euro

Although the ongoing Greek bailout negotiations are keeping the Euro under pressure, the common currency was able to strengthen as final manufacturing PMIs for the currency bloc and its largest economies were positively revised. With ecostats for the Eurozone in short supply today, Euro movement may be restricted.

US Dollar

Sub-par ADP Employment Change and ISM Manufacturing data for the US undermined demand for the ‘Greenback’ and the safe-haven currency lost ground against several of its peers as the reports fuelled concerns that the Federal Reserve might delay increasing interest rates until after the summer. In the hours ahead the US initial jobless/continuing claims and Factory Output reports may prompt ‘Greenback’ volatility.

Australian Dollar

Ahead of the publication of China’s Services/Composite PMIs, the Australian Dollar extended declines against the Pound and US Dollar. The ‘Aussie’ was trading in the region of a three-week low against the ‘Greenback’ as the Australian trade deficit was shown to have widened to the most for five months as a result of dropping iron ore prices.

New Zealand Dollar

The New Zealand Dollar rallied by around 0.5% against the Pound and 0.6% against the US Dollar during the Australasian session. The South Pacific asset was supported by the news that the price of domestic commodity exports climbed by 4.6% in March, the strongest increase for nearly 2 years.

Canadian Dollar

The Canadian Dollar broadly gained as the RBC Canadian Manufacturing PMI advanced from 48.7 to 48.9 in March. While the gauge remained below the 50 mark separating growth from contraction, it was at least an improvement. Canada’s International Merchandise Trade number is unlikely to have much of an impact on the ‘Loonie’.

South African Rand

Below-forecast US data helped the Rand gain on a number of its rivals on Thursday as emerging-market currencies benefited from poor US data and revised US interest rate hike bets. South African data is in short supply for the rest of the week so further Rand movement will be the result of US news and global economic developments.

Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.

Pete Southern About Pete Southern
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.


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