The Euro came under pressure yesterday afternoon following weak data out of the region’s largest economy. German Retail Sales fell 0.7% month on month in February in addition to a 15-month low in German Manufacturing PMI. Fears of a slowdown in economic growth will continue to put pressure on the single currency in the longer term.
A potential trade war between the US and China took a step in the wrong direction yesterday as the Trump administration released a list of sectors that would be targeted for up to $50bn of import tariffs. Fears of a global trade war are gradually increasing as the US is seemingly fixated on reducing their $340bn trade deficit with China. The Dollar may see a bearish run on the back of this, as investors look to other safe-haven currencies.
Both Sterling and Euro edged higher against the Greenback this morning as China announced fresh plans for additional tariffs on 106 US products worth up to $50bn annually. Year on year Eurozone CPI came in at the predicted 1.4%, highlighting and adding weight to the suggestion that the ECB’s current programme seems to be working. From the UK, the UK Construction PMI missed target and unexpectedly fell into contraction as the gauge came out with a reading of 47. This will put more focus on the Services figure due out tomorrow to see if this also disappoints.