• Failed Pfizer Takeover Weighs On Sterling
  • Failed Pfizer Takeover Weighs On Sterling

    David Sumner | 07:45 | 04/05/14
    The Pound declined versus the greenback for the first time in over a week following news that the level of construction activities in the U.K. dropped. U.K. Construction ...

The Pound declined versus the greenback for the first time in over a week following news that the level of construction activities in the U.K. dropped.

U.K. Construction Posts Drop

The British Pound weakened against the U.S. Dollar and fell versus the majority of its Forex counterparts following news indicating that the U.K. construction purchasing manager’s index posted a decline from 62.5 to 60.8 in April, missing predictions for the sector to post a reading of 62.0. The British currency gained the most in close to five years on Thursday as economic releases revealed that manufacturing fared better than previously thought and expanded at the quickest pace in five months, thereby improving the outlook for the country’s economic recovery. The Sterling came under pressure as AstraZeneca Plc, the U.K.’s second largest drug manufacturer, rejected Pfizer’s takeover offer. The British currency was also affected by comments by Bank of England governor Mark Carney, who suggested that policy makers should not ignore the remarkable surge in real property prices.

Aussie Retains Gains

The Australian Dollar continued to trade to the upside even though its gains were limited by recent lackluster economic fundamentals issued by China, and by a drop in iron ore prices in Australia. The Aussie was supported by domestic data indicating that producer prices climbed faster than predicted in the initial quarter of the year. The official news revealed a producer price index hike of 0.9 percent, beating forecasts for a 0.5 percent advance. Meanwhile, China announced that its manufacturing PMI posted at 50.4 for April, coming in slightly lower than the anticipated 50.5.

Yen Dips Ahead of Employment Data

The Yen depreciated against the U.S. Dollar while money market investors awaited the highly anticipated U.S. non-farm payroll reports. Hawkish option wagers on the greenback versus the Yen rose to a five-month high. In Japan, domestic announcements denoted that the country’s level of unemployment remained at 3.6 percent in March, meeting forecasts. This is the lowest rate since December of 1997, when it posted at 3.5 percent. The release also confirmed that household consumption climbed 7.2 percent, beating the predicted 1.0 percent rise. This is the first surge in two months following February’s 2.5 percent decline. The Japanese monetary unit extended losses after the U.S. reported solid employment metrics boosting confidence in the world’s biggest economy. The Labor Department stated that companies added 288,000 payrolls last month, and unemployment plummeted from 6.7 to 6.3 percent.

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