Pound Loses Ground on the Dollar

The UK pound has acceded ground to the US dollar this morning, as the GBP/USD rate fell to buying $1.41, from beginning the day purchasing $1.415.

The latest UK service sector Purchasing Manager’s Index (PMI) from Markit, did reveal a rise in activity, but the survey also highlighted that the services sector is at its weakest level since the first quarter of 2013.

UK Banks will be forced to hold 1% of their assets in the lead up to the referendum on an exit from the European Union, which will be held on June 23, following the release of the Banks of England’s committee meeting minutes.

This is in order to provide a shield to the UK economy if there is a no vote, that is almost certain to provoke ongoing uncertainty.

Euro Weakens to US Dollar 

So far, this morning CET, the EUR/USD rate has changed from the euro buying $1.139 to $1,135.

This is despite some data emanating from the United States Bureau of Labor Statistics, which unveiled that job openings were little changed at 5.4 million on the last business day in February.

In their daily forex report, LMAX Exchange analysts said that the euro has been weighed down due to softer German factory orders, and weaker euro area and German services PMIs.

European Central Bank Governing Council  member Ewald Nowotny, has also gone public saying that there are  limitations of monetary policy, and called for additional public investment.

As risk off flow is working its way back into the market, demand for the euro against the risk correlated currencies has helped to prop EUR/USD into setbacks, LMAX Exchange opined. 

Production in Germany Falls By 0.5% in February 

In February the level of production in German industry fell by 0.5% in comparison to January, official figures revealed.

This was considerably down from the month on month rise of 2.3% that was recorded for January in contrast to December last year.

Production in German industry, excluding energy and construction, was also down by 0.5%.

While for capital goods and the production of consumer goods, decreased by 1%.

The creation of intermediate goods showed an increase of 0.1%, while the production in construction also increased by 1.3%. energy production was down by 1.8% in February 2016

Meanwhile, the financial information company Markit, have released their latest data of the German construction industry, and their PMI has found a rise in activity for the fourteenth consecutive month.

This is despite the index falling slightly in March to 55.8, down from 59.6 in February.

Also, the volume of new business received by German construction companies rose for the fourth month running in March. 

Italian Economy to Steadily Grow 

The current situation of the Italian economy shows that there are elements of uncertainty on the supply side. On the demand side, the steadfast growth of consumption is accompanied by a slight recovery in investment.

Generally, the composite leading indicator for Italian economy remains positive, suggesting that there will be steady but not spectacular growth for the first quarter in 2016.

In the final quarter of last year, the Italian economy grew by 0.1%, which eased from the previous quarter by the same figure.