The British pound whipsawed against the majors at the start of the week, plunging sharply from 1.5251 to 1.4785 against the dollar before settling around the 1.50-mark by afternoon trading. Political uncertainty in the UK was the primary catalyst for the steep sell-off in the sterling. Meanwhile, the greenback was softer against the euro and the Canadian dollar as traders pushed US equities higher, with the Dow Jones up by 0.72% and the Nasdaq improving by almost 1.5%. Crude oil came under pressure in the New York session, retreating beneath the $79-mark to slide to $78.87.
The economic reports released at the start of the week moved the foreign exchange markets, particularly a sharply better than expected reading in Canada’s GDP data. The Canadian economy expanded at its fastest pace since 2000 with fourth quarter GDP printing at 5.0%, outpacing consensus estimates for growth of 4.1% compared with an upwardly revised growth rate of 0.9%. On a quarterly basis, the economy posted a robust 1.2% expansion compared with a revised 0.2% increase.
The US reports saw January personal consumption, personal income, PCE and the February manufacturing ISM index. The personal consumption figure printed higher at 0.3% while the personal income reading was lower than expected at 0.1%. The February manufacturing ISM report posted its seventh consecutive monthly expansion, printing at 56.5, albeit less than market expectations and down from 58.4 from January.
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