Pound (GBP) Gains as Manufacturing PMI Meets Expectations
The Pound (GBP) edged higher at the start of this week’s session in response to the UK’s latest manufacturing PMI.
May’s finalised figures printed in line with expectations, with an easing rate of contraction bolstering hopes the worst of the UK’s economic woes are behind it.
Looking ahead, Sterling may struggle to replicate its success today with the focus on Brexit as the UK and EU prepare to hold their last round of talks ahead of a key summit later in the month.
Euro (EUR) Fluctuates on ECB Stimulus Speculation
Trade in the Euro (EUR) was mixed on Monday, with the single currency initially strengthening amidst expectations the European Central Bank (ECB) will expand its quantitative easing programme later this week.
However, the Euro was unable to sustain these gains as a slighter weaker-than-expected Eurozone manufacturing PMI and demand for riskier assets undermined EUR exchange rates.
In the absence of any notable data the focus for EUR investors is likely to remain on the ECB’s upcoming policy meeting, likely limiting movement in the Euro.
US Dollar (USD) Stumbles amid Widespread Political Unrest in US Cities
The US Dollar (USD) was on the defensive yesterday Investors steered clear from the ‘Greenback’ as the US was rocked by widespread protests and rioting, the country’s worst civil unrest since the assassination of Martin Luther King in 1968.
The publication of the ISM manufacturing PMI offered little support to USD exchange rates, which saw US factory growth come up slightly short of expectations last month.
Looking ahead, USD investors will be keeping a close eye on the demonstrations in the US as well as potential developments between the US and China.
Canadian Dollar (CAD) Dips on Modest Oil Sell-Off
The Canadian Dollar (CAD) ticked lower on Monday, with the commodity-linked ‘Loonie’ undermined as WTI crude oil prices dropped back below $65 a barrel.
Australian Dollar (AUD) Buoyed by RBA’s Upbeat Comments
The Australian Dollar (AUD) trended higher overnight on Monday, with AUD investors cheering remarks from the Reserve Bank of Australia (RBA) as the bank suggested Australia’s economy may weather the coronavirus crisis better than initially feared.
Meanwhile, the ‘Aussie’ is likely to face some headwinds later tonight as Australia’s latest GDP figures look set to confirm a sharp drop in domestic growth in the first quarter of 2020.
New Zealand Dollar (NZD) Strengthens in Risk-Off Trade
The New Zealand Dollar (NZD) also trended higher overnight as the risk-sensitive currency was bolstered by market optimism and the USD sell-off.