Euro and US Dollar Knocked by Abysmal PMI Releases

Pound (GBP) Dented by Weak Retail Sales

The Pound (GBP) was placed on the defensive at the end of last week, after UK retail sales were shown to have contracted for the second consecutive month in June.

Helping to cap Sterling’s losses however was the publication of the UK’s latest preliminary PMI, which printed just above forecast this month.

Looking ahead, the Pound could face additional headwinds at the start of this week with the release of the Confederation of British Industry’s industrial trends figures, if July’s index reports another fall in order growth.

Euro (EUR) Slumps on Dire Eurozone PMIs

The Euro (EUR) closed last week on a sour note, undermined by the publication of the Eurozone’s latest PMIs as they reported growth in both the manufacturing and services sector fell well below expectations this month.

EUR investors were particularly worried by the manufacturing index, which slipped into contraction territory for the first time in two years, giving rise to fresh Eurozone recession fears.

The focus at the start of this week will be on Germany’s IFO business climate index. Will another drop in business morale extend the Euro’s losses today?

US Dollar (USD) Fluctuates as Market Mood Shifts

The US Dollar (USD) initially strengthened on Friday, demand for the safe-haven currency being bolstered by a risk-off market mood.

However the publication of the latest S&P US services PMI quickly reversed this uptrend after reporting the US service sector suffered a sizable contraction in growth this month.

Turning to this week, movement in the US Dollar may be limited in the first half of the session, with USD investors likely to be reluctant to make any aggressive bets ahead of the Federal Reserve’s latest interest rate decision on Wednesday.

Canadian Dollar (CAD) Bolstered by Positive Retail Sales Data

The Canadian Dollar (CAD) firmed on Friday as CAD investors welcomed Canada’s latest retail sales figures, after they reported a larger-than-expected acceleration of sales growth last month.

Australian Dollar (AUD) Fluctuates in Mixed Trade

The Australian Dollar (AUD) traded erratically at the start of this week’s session, with a fluctuating market mood infusing volatility into the risk-sensitive ‘Aussie’.

New Zealand Dollar (NZD) Wavers amid Fluctuating Market Sentiment

The New Zealand Dollar (NZD) also fluctuated overnight, with the ‘Kiwi’s initial gains quickly evaporating as market sentiment soured.

Matthew Andrews

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