Pound (GBP) Slips as PMI Adds to Economic Concerns
The Pound (GBP) softened yesterday as a confirmed contraction in UK manufacturing activity added to mounting fears over the UK’s economic outlook.
GBP investors are increasingly worried that the British economy will see a recession by the end of the year, and this downturn in factory activity just compounded their concerns.
Turning to today, there’s no UK data due out. As a result, domestic economic headwinds could continue to weigh on Sterling.
Euro (EUR) Pressured by Gloomy Manufacturing PMI
The Euro (EUR) initially stumbled yesterday after the final manufacturing PMI confirmed that Eurozone factory activity contracted at its fastest pace in three years last month.
However, hawkish European Central Bank (ECB) comments and a pullback in the US Dollar (USD) helped the Euro recoup some losses through the second half of the session.
This morning the single currency could struggle after disappointing German trade data. Export growth in the Eurozone’s largest economy unexpectedly shrank in May.
US Dollar (USD) Retreats following Dismal Data
The US Dollar jumped as this week’s session began. Renewed Federal Reserve rate hike bets seemed to lift USD, following a sharp selloff last Friday.
The ‘Greenback’ couldn’t sustain its gains, however. The ISM manufacturing PMI unexpectedly fell, hitting its lowest level since May 2020. This weak reading dented Fed bets, dragging the US Dollar down.
US markets are closed today for Independence Day, which may lead to subdued movement in USD exchange rates.
Canadian Dollar (CAD) Volatile amid Choppy Oil Prices
The Canadian Dollar (CAD) fluctuated sideways yesterday as turbulence in the oil markets impacted the commodity-linked ‘Loonie’.
Looking ahead, Canada’s manufacturing PMI is due out this afternoon. Could a deepening contraction in the sector pull CAD lower?
Australian Dollar (AUD) Whipsaws on RBA’s Hawkish Pause
The Australian Dollar (AUD) saw volatility last night after the Reserve Bank of Australia’s (RBA) interest rate decision.
The RBA left rates unchanged, causing AUD to dive. However, the bank also signalled that there may be more rate rises in the future, which helped the ‘Aussie’ bounce back.
New Zealand Dollar (NZD) Rises amid Risk-Positive Trade
The New Zealand Dollar’s (NZD) positive correlation with the ‘Aussie’ caused some turbulence last night. Nevertheless, an upbeat market mood helped the risk-sensitive ‘Kiwi’ strengthen overall.