It has been another rather subdued trading session for major currencies.
The GBP/USD cross dipped below 1.30 this morning following the release of somewhat disappointing UK labour market data. In particular weekly wage growth slowed to 2.9% yoy in December from 3.2% yoy in January. Sterling then rebounded after the newly appointed Chancellor of the Exchequer confirmed in a tweet that he would not delay the announcement of the budget, currently scheduled for 11th March, with markets hoping for a fiscally simulative budget.
There was no such relief rally for the Euro which weakened a tad in the wake of weak German macro data. The ZEW Economic Sentiment index, which in January had rebounded to its strongest level since mid-2015, dropped from +26.7 to +8.7 in February. The pick-up in economic growth in the Eurozone’s largest economy in Q1 appears tentative at best. EUR/USD dropped below 1.08 for the first time since March 2017 and there is seemingly little appetite in the market to go long the Euro, even at these depressed levels.
