Pound (GBP) Mixed amid Service Sector Slowdown
The Pound (GBP) had mixed success in yesterday’s session, with the UK’s Covid optimism offset by a lacklustre services PMI.
While the UK’s above-expected PMI initially boosted Sterling, the notable slowdown in service-sector activity left the Pound vulnerable to losses as rival currencies strengthened.
The Bank of England’s (BoE) interest rate decision is in the spotlight today. If the central bank announces a planned timeline for tapering bond purchases, Sterling could soar.
Euro (EUR) Volatile on US and EA Data
The Euro (EUR) initially slipped yesterday, as the final services PMIs from the Eurozone and Germany missed forecasts. Slower-than-expected growth in the Eurozone’s retail sales also failed to impress EUR investors.
The single currency then fluctuated in the afternoon, spiking and then slumping in response to mixed US data releases due to the currencies’ strong negative correlation.
This morning, German factory orders for June smashed forecasts to grow by 4.1% – more than double the predicted 1.9% growth. This could help the Euro recover today.
US Dollar (USD) Gains on Services PMI
The US Dollar (USD) experienced some turbulence yesterday, dropping sharply in the early afternoon as the ADP employment change fell far short of expectations.
However, the ‘Greenback’ bounced back after the ISM services PMI beat expectations, pointing to the steepest pace of expansion on record.
This afternoon’s initial jobless claims data could further support USD, as unemployment claims are expected to drop.
Canadian Dollar (CAD) Firms despite Drop in Oil Prices
The commodity-linked Canadian Dollar (CAD) posted modest gains yesterday, despite oil prices dropping by $2 per barrel after US crude oil inventories unexpectedly increased.
Canada’s balance of trade figures could drive some movement in the ‘Loonie’ this afternoon. Will the figures shock markets as they did last month?
Australian Dollar (AUD) Firms on Positive Trade Data
The Australian Dollar (AUD) ticked higher in overnight trade, after the latest Australian balance of trade figures showed that the country’s trade surplus widened more than was expected.
New Zealand Dollar (NZD) Flat on Mixed Sentiment
The New Zealand Dollar (NZD) traded sideways overnight, as global risk appetite remained fairly neutral, with rising Covid cases offsetting economic optimism.