US Dollar continues to climb as PMI beats forecasts

Pound (GBP) slides despite positive services PMI

The Pound (GBP) wavered lower yesterday, despite an upward revision to the UK’s final services PMI.

Although activity in the vital services sector accelerated last month, there were also signs of easing inflation. This ultimately seemed to undermine GBP as markets bet on Bank of England (BoE) interest rate cuts.

Turning to today, there’s a lack of market-moving UK data. As a result, Sterling may struggle to find a clear direction.

Euro (EUR) subdued following weak German trade data

The Euro (EUR) was muted yesterday, slipping against its stronger peers and trading sideways elsewhere, following downbeat German trade data.

A cooldown in Eurozone producer prices also subdued EUR, as it contributed to speculation around when the European Central Bank (ECB) will start cutting rates.

German factory orders smashed forecasts this morning, which could potentially lend EUR support. Looking forward, an expected contraction in Eurozone retail sales could weigh on the common currency later on.

US Dollar (USD) marches higher following strong PMI

The US Dollar (USD) extended its recent upside on Monday, with hawkish comments from Federal Reserve Chair Jerome Powell over the weekend providing the initial upside.

A better-than-expected ISM services PMI in the afternoon further boosted USD’s appeal. With the US economy holding strong, markets further scaled back bets on Fed interest rate cuts this year.

Risk appetite may drive the ‘Greenback’ through today’s session. A speech from Fed policymaker Loretta Mester could then lift USD in the evening, if she echoes Powell’s recent hawkish remarks.

Canadian Dollar (CAD) unclear amid strong USD and weak oil

The Canadian Dollar (CAD) was mixed yesterday. While CAD’s positive correlation with USD lent the currency support, falling oil prices pressured the crude-linked ‘Loonie’.

This afternoon, a slight decline in Canada’s Ivey PMI could place some pressure on the Canadian Dollar.

Australian Dollar (AUD) firms on RBA’s hawkish hold

The Australian Dollar (AUD) rose last night as the Reserve Bank of Australia (RBA) left the door open to another interest rate hike at its most recent policy meeting.

New Zealand Dollar (NZD) enjoys AUD correlation

The New Zealand Dollar (NZD) also found some success last night as the ‘Kiwi’ enjoyed its positive correlation with the ‘Aussie’.

Samuel Birnie

Contact Samuel Birnie

Do Not Sell My Personal Information