Standstill. That’s one way to explain the currency market over the past day. UK PMI data came out positive except that of manufacturing PMI.
Today retail sales came in at -0.3% vs forecasts at 0.6%, as we know retail sales speaks volumes about the health of an economy, so a contraction only aligns with the income squeeze we are seeing. If consumers feel confident about their financial future retail sales tend to push higher along with the economy. However, when uncertainty seeps into consumers they tend to hold off on purchases and the retail sales figure is the first proxy of that. With a weak government spring budget and expectations to see a 54% surge in energy bills it’s clear to say that Britons won’t be breaking open their wallets on retail goods in the coming months. As a result, pound is trading 40 points lower at 1.3160 against the dollar and is sitting at 1.1950 against the euro.
Over in the U.S jobless claims reached a 53-year low, so once again reaffirming the statements made by Fed Chair Jerome Powell on the tightness of the labour market.
Over in Europe we have seen PMI data hold up fairly well despite the current landscape within the economy, beating forecasts across all three measurements. The Russia economy is set to erase 15 years of economic gains due to sanctions and mass departures of corporations.
The euro against the dollar is holding steady at 1.10 at the time of writing, it seems global asset and money markets are holding tight for any developments in Ukraine to add a sense of normality to what already has been a far from normal economic landscape.
