Strength for the US dollar due to positive US employment data

The U.S. dollar was higher against almost all of its major counterparts on Thursday, following the release of better than expected U.S. employment data, while concerns over the outlook for the global economy also supported the greenback.

China's manufacturing activity contracted in March, a preliminary HSBC survey showed, raising fears that the global slowdown is harming its economy. The HSBC Purchasing Manager's Index (PMI) fell to 48.1 from 49.6 in February, the fifth monthly fall giving markets a big sense of Risk Aversion.

The Department of Labor said U.S. jobless claims fell to the lowest level since February 2008 last week, dropping to a seasonally adjusted 348,000, beating expectations for a decline of 3,000 to 350,000

In the Eurozone yesterday morning, data showed that manufacturing activity in Germany slowed to the lowest level in four months in March, while the services sector also hit a four-month low.

From the UK yesterday, UK retail sales volumes fell by 0.8% in February compared with the previous month, figures from the Office for National Statistics have shown. The decline was bigger than expected, but sales volumes over the past three months were still 1.7% higher than the same period a year earlier, restricting the pound to make any gains.

Looking ahead today, it is a quiet day in regards to fundamentals however the main theme may continue with market sentiment showing risk aversion. Due to China’s negative figures, weak figures from UK and the euro yesterday we may see investors continue with the “Safe Haven” trend leading into the weekend.

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