The pound finished the week lower after the UK’s trade deficit widened even further in January to £9.793bn, more than the £8.7bn forecasted with exports falling to their lowest level in 18 months.
Separately the Office of National Statistics revealed that UK construction output rose by 1.8% in January, however the increase was not big enough to effect overall economic growth between October and December.
Overall the pound finished 0.82% lower against the euro last week and 0.62% lower against the US dollar.
The euro finished a strong week on a high after data revealed that employment in the region increased by 0.1% between October and December.
Breakdown into the data is encouraging, with Portugal employment up 0.7%, Spanish employment up 0.6% and Greek employment up by 0.2% in the same period.
Overall the euro finished at a 2 ½ month against the pound and a 2 ½ year high against the US dollar.
US data was disappointing with producer price index figures only rising by 0.9% instead of 1.2% in February. Consumer Sentiment as measured by Reuters also failed to rise up to expectations, up to 79.9 instead of 82.0.
The US dollar also had a pretty poor weak, with the US dollar index falling by 0.25% on the week.
This morning we have seen Eurozone inflation figures released with the rate falling to 0.7% from 0.8%. Deflationary worries are still persisting in the Eurozone and the data this morning may well put pressure on the ECB to lower interest rates further, which could well weaken the euro.
13.15pm – USD – Industrial Production (Feb): Expected to increase to 0.2%.