Pound Climbs on Industrial Orders, US Dollar Declines as Treasury Yields Dip

Pound (GBP) Gains on CBI Order Book Balance

The Pound (GBP) regained some ground yesterday, after dipping slightly overnight, following the Confederation of British Industry’s order book balance, which came in at +19 – its highest level since May 1988.

Sterling may also have been buoyed by coronavirus optimism, after health secretary Matt Hancock said that the data looks encouraging for the revised ending of restrictions on 19 July.

Today, the flash PMIs showed a dip in both manufacturing and services activity this month, which may weigh on the Pound.

Euro (EUR) Rangebound amid Low Consumer Confidence

The Euro (EUR) traded mostly sideways yesterday, despite German 10-year yields rising to multi-week highs of -0.144%.

The rising yields were offset by disappointing consumer confidence data, after the Eurozone flash figures for June came in at -3.3, just below expectations of -3.

Looking ahead, the single currency could find some support today, as both the manufacturing and services flash PMIs printed above expectations.

US Dollar (USD) Dips on Falling US Treasury Yields

The US Dollar (USD) fell slightly during yesterday’s session, following a small dip in US Treasury bond yields.

Reinforcing these losses were comments from Federal Reserve Chair Jerome Powell as he testified before Congress, in which he reiterated his view that the recent surge in US inflation is mostly transitory.

Again, the Markit flash PMIs are out today. The US figures are expected to show a slight dip in both services and manufacturing activity, but any surprise results could impact USD exchange rates.

Canadian Dollar (CAD) Gains amid High Oil Prices

The Canadian Dollar (CAD) made some gains yesterday, with the commodity-linked ‘Loonie’ buoyed by a demand for oil as WTI crude sustained highs of over $73 per barrel.

Looking ahead, CAD could face some headwinds this afternoon as Canada’s retail sales figures for April are forecast to show a 5% contraction.

Australian Dollar (AUD) Flat following Disappointing PMIs

The Australian Dollar (AUD) was relatively rangebound overnight, with worse-than-expected PMI figures offset by an improving market mood.

New Zealand Dollar (NZD) Climbs in Risk-On trade

The New Zealand Dollar (NZD) gained ground in overnight trade, with the risk-sensitive currency buoyed by a bullish market sentiment.

Samuel Birnie

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