Pound (GBP) gains on revised services PMI
The pound (GBP) found modest support yesterday, strengthening against some of the weaker currencies following an upward revision to the UK’s final services PMI for July.
That said, with the report still pointing to a slowdown in activity – and with the Bank of England’s (BoE) policy announcement on the horizon – the pound remained under pressure against its stronger counterparts.
Today, GBP movement may remain limited as traders look ahead to the BoE’s decision tomorrow.
Euro (EUR) dips as PMI disappoints
The euro (EUR) softened in early trade on Tuesday after the Eurozone’s final services PMI was revised down, adding to concerns over the bloc’s economic resilience.
However, EUR managed to claw back some losses later in the day, helped by its inverse correlation with a weakening US dollar (USD).
This morning’s surprise fall in German factory orders could add to the euro’s woes, although upbeat Eurozone retail sales figures may help to cushion the blow.
US dollar (USD) weakens following soft ISM services PMI
The safe-haven US dollar initially rose on Tuesday, benefitting from a risk-off market mood.
Yet the rally quickly faded in the afternoon after the ISM services PMI fell short of forecasts, revealing that service sector growth nearly ground to a halt in July.
With no major US data releases on the docket today, USD could continue to move in line with market risk appetite.
Canadian dollar (CAD) directionless amid lower oil prices
The Canadian dollar (CAD) struggled for direction on Tuesday, with falling crude prices weighing on the oil-sensitive currency.
Looking ahead, Canada’s latest services PMI could spark movement in the ‘loonie’. Persistent weakness in the sector may drag on CAD sentiment.
Australian dollar (AUD) lifted by upbeat data and market mood
The Australian dollar (AUD) gained ground overnight, supported by a stronger-than-expected Ai Group industry index reading and a broadly positive risk tone.
New Zealand dollar (NZD) boosted by labour market surprise
The New Zealand dollar (NZD) also firmed as Q2 jobs data showed that unemployment rose by less than anticipated, providing a welcome lift for the currency.
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