Pound (GBP) subdued despite stronger final PMI reading
The pound (GBP) drifted through yesterday’s session after the UK’s final services PMI failed to generate any sustained momentum for Sterling.
Although the index was revised higher, signalling a stronger rebound in services activity during July, the pound’s early advance quickly faded as buying interest proved short-lived.
With no UK economic releases scheduled for today, trading in Sterling is likely to remain relatively subdued.
Euro (EUR) lacks direction as markets assess latest figures
The euro (EUR) also traded without a clear trend yesterday, as an upward revision to the Eurozone’s final services PMI failed to inspire stronger demand.
While the report confirmed the bloc’s services sector returned to growth in July, the expansion was only modest. At the same time, a 0.3% fall in Eurozone producer prices offset any positive impact.
Looking ahead, the single currency may come under pressure later today, with forecasts pointing to weaker German factory orders and slower Eurozone retail sales in June.
US dollar (USD) softens as risk appetite strengthens
The US dollar (USD) edged lower yesterday, with improving market sentiment reducing demand for the safe-haven currency during the first half of the session.
Later, the latest ISM services PMI offered little support for the ‘greenback’. July’s reading rose only marginally from 54 to 54.1, falling short of expectations for an increase to 54.5.
The latest US initial jobless claims figures are due later today, with a larger-than-expected rise in claims likely to weigh on USD. For now, lingering caution surrounding a possible agreement to reopen the Strait of Hormuz is helping to underpin the currency.
Canadian dollar (CAD) subdued as oil prices fluctuate
The oil-sensitive Canadian dollar (CAD) traded quietly yesterday as crude prices briefly slipped to multi-week lows amid cautious optimism that the US and Iran could reach a fresh ceasefire agreement.
Looking ahead, Canada’s latest services PMI may influence the ‘loonie’. Should it signal another month of contraction in July, CAD exchange rates may remain under pressure.
Australian dollar (AUD) weakens despite upbeat trade figures
The Australian dollar (AUD) lost ground during Wednesday’s overnight session, as a stronger-than-expected expansion in Australia’s trade surplus, driven by a sharp recovery in exports, failed to boost the risk-sensitive currency.
New Zealand dollar (NZD) slips in cautious trading
The New Zealand dollar (NZD) also eased overnight, with the ‘kiwi’ pressured by a deterioration in overall market risk sentiment.
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