During European trading the Pound came under pressure as a result of disappointing UK trade balance figures and the news that construction output in the UK slowed in January.
Ukraine tensions also weighed on higher risk assets.
With Sunday’s all-important Crimea referendum approaching, industry experts speaking exclusively to Bloomberg News were quoted as saying; ‘It’s very difficult to imagine a scenario whereby everyone just kind of kisses and makes up, so on Monday morning it’s not going to be a case of everything’s fine. It’s either going to be very very bad, or very bad.’
Pound Sterling (GBP) softened against several of its major rivals as the weekend approached.
However, the Pound was able to recover losses against the US Dollar (USD) as US reports also fell short of estimates.
The University of Michigan confidence index slid from 81.6 in February to 79.9 in March rather than rising to 82.0 as expected.
The reading was a four month low and indicates that the unseasonably bad winter did have an impact on consumer sentiment.
The index of expectations for six months time dropped from 72.7 to 69.4 – the lowest reading since November 2013.
In the view of economist Jim O’Sullivan; ‘Wealth has generally been rising with the equity market and home prices going up, but I would certainly say the labour market is the most important driver of confidence. There are some questions about how strong the labour market is now and the payrolls have slowed on balance, but the message from claims is that the underlying trend has not weakened.’
Separate US data showed that producer price inflation cooled in February, with the Labour Department index dipping by 0.1 per cent following January’s 0.2 per cent gain.
While UK employment figures and the publication of the minutes from the Bank of England’s latest policy meeting could have a considerable impact on the direction taken by the Pound next week, GBP/USD movement may also be directed by US industrial production, manufacturing production, inflation and initial jobless claims data.
The Federal Open Market Committee will also be delivering its rate decision on Wednesday.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.6012,
US Dollar,,Canadian Dollar,1.1076, 
US Dollar,,Euro,0.7190,
US Dollar,,Australian Dollar,1.1055,
US Dollar,,New Zealand Dollar,1.1699 ,
Canadian Dollar,,US Dollar ,0.9017 ,
Pound Sterling,,US Dollar,1.6620 ,
Euro,,US Dollar,1.3925,
Australian Dollar,,US Dollar,0.9043,
New Zealand Dollar,,US Dollar,0.8550 ,
[/table]
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