On Friday, new figures from the Federal Reserve showed that US manufacturing has slowed for the second month in a row, dropping by 0.4% in February. This was worse than economists predicted, as they expected a small rise after the decline in January.
The dollar headed to its biggest weekly loss since December, dragged by weak US economic data, which, in turn, strengthened the euro. Meanwhile, the pound was unfazed by Brexit chaos.
This decline in manufacturing growth, as well as poor economic data released earlier in the week, supports the Fed’s stance towards interest rates. The Fed’s ‘patient’ approach to interest rates is thought to be partly why we’re seeing weakness from the dollar.
University of Michigan consumer figures were also published, painting a more optimistic picture. Consumer confidence has evidently picked up in March, beating market expectations. It was the highest reading in three months.
Fed officials are scheduled to meet tomorrow and Wednesday to assess the economy and deliberate on the future course of monetary policy.
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