It’s been a chaotic few weeks in British politics, and the Pound Sterling exchange rate has been volatile to news and developments. On Wednesday, the British Pound to US Dollar (GBP/USD) exchange rate reached highs of 1.3196, pushing towards the 1.32 level. Meanwhile, the Pound to Euro (GBP/EUR) currency pair hit levels of 1.1760.
US Dollar Exchange Rate Weakened by ADP Employment Change Data
The ADP Employment Change stat is often seen as a precursor to the US Non-Farm Payrolls figure which prints just a few days later. Today’s reading came in at a disappointing 18-month low, with only 129K new jobs created in March. Markets had expected a 170K figure, and it’s possible Non-Farm Payroll expectations will be revised down as a result. At the moment, 175K new jobs are expected in March on the year, following the incredibly surprising 20K figure the month before–despite 180K being forecast.
Nationwide Economist Ben Ayers commented:
‘A shockingly low jobs figure for February does not change the labour narrative by itself. The three-month trend in job gains remains solid while survey data suggest no letup in demand for workers by employers.’
UK Services PMI Sinks as Brexit Bites
Meanwhile, in the UK, the Services Purchasing Managers’ Index (PMI) from Markit showed a surprise decline to 48.9 in March, residing firmly in contraction territory. Any figure below 50.0 shows contraction in the sector, while above denotes growth. Economists had forecast a smaller fall from 51.3 to 51.0.
For the first time since the Global Financial Crisis, UK services companies have noted a downturn in orders for three consecutive months.
#UK #services #PMI shows new business contracted for 3rd month in a row in March; 1st time for this since Q1 2009. Businesses reported to be deferring or cancelling spending amid intense #Brexit uncertainties, #consumers limiting discretionary spending. Export demand fell
— Howard Archer (@HowardArcherUK) April 3, 2019
Policy Chair at the City of London Corporation Catherine McGuinness commented:
‘The slump in the services sector is an extremely worrying development, demonstrating the real strain that continued uncertainty is putting on the economy. Businesses up and down the country are cutting back on investment amid the Brexit limbo that has gripped the country since 2016.’