Pound (GBP) finds modest support despite lacklustre PMI
The pound (GBP) managed to gain ground against its weaker rivals yesterday, despite a lack of high-impact economic data.
The only UK release was the final services PMI, which printed in line with preliminary estimates to show a slowdown in activity. However, a generally upbeat outlook for the UK’s vital services sector may have supported GBP.
Market-moving UK economic data is thin on the ground today, which could leave the pound to trade without a clear direction.
Euro (EUR) softens as ECB decision looms
The euro (EUR) faced some selling pressure yesterday, with the currency struggling to attract support ahead of an expected interest rate cut from the European Central Bank (ECB).
In addition, a larger-than-forecast decline in Eurozone producer price inflation put some pressure on the common currency.
All eyes are on the ECB today as it is expected to deliver its first rate cut in over eight years. While a cut could dent EUR, any signs that the bank will pause before pursuing further cuts could support the euro, potentially leading to volatility.
US dollar (USD) wavers following mixed data
The US dollar (USD) fluctuated yesterday as markets reacted to mixed US data releases.
The latest ADP employment change figure printed below expectations, showing a steeper slowdown in job creation. However, the ISM services PMI smashed forecasts to point to a healthy expansion in US service sector activity, providing USD with support.
Looking ahead, last week’s initial jobless claims figure is due out this afternoon. Could an uptick in unemployment benefits claims weigh on the ‘greenback’?
Canadian dollar (CAD) slumps as BoC cuts rates
The Canadian dollar (CAD) slumped yesterday, striking multi-month lows against some of its peers, after the Bank of Canada (BoC) cut interest rates. Markets expect more rate cuts in the coming months.
This afternoon, Canada’s latest Ivey PMI could aid the ‘loonie’ as economists expect another improvement in activity. However, the impact of the BoC decision could continue to pressure CAD exchange rates.
Australian dollar (AUD) unable to hold gains despite positive trade data
The Australian dollar (AUD) initially strengthened overnight following better-than-expected Australian trade data. However, the ‘Aussie’ relinquished most these gains as the overnight session came to a close.
New Zealand dollar (NZD) rises and falls alongside AUD
The New Zealand dollar (NZD) traded in tandem with the ‘Aussie’ last night, initially climbing before retreating as the session progressed.