Sterling
A strong construction sector did not make for a strong sterling yesterday. While Construction Purchase Manager Index (PMI) figures were the best they have been since May 2012, sterling still lost ground against the US dollar – pushing as low as 1.5150 against a bright US dollar in the early afternoon. Today the big news is the last of the PMI figures - Services which make up 75% of the UK's GDP and has shown consistent growth, month on month, since February. The consensus expect slightly less growth than last month, but positive news nonetheless. If the release beats expectations - given the importance for the UK's economy as a whole - expect sterling to strengthen. That being said, you can expect the market as a whole to remain nervous in anticipation of the Bank of England monetary policy meeting on Thursday where we will see Mark Carneys’ first rate decision as Governor. Not only that, but on the same day we will have the ECB’s decision on interest rates and decreased liquidity due to the US markets being shut in accordance to the 4th July Bank Holiday. Call your trader this morning for the very latest developments.
Euro
The euro was soft yesterday in a day that saw unemployment figures revised up to new all-time highs of 12.2%. While it held its own against a weak sterling during the course of the day only losing ground after close of business here, a dominant US dollar pushed it below 1.30, remaining below this key psychological level as we enter today. Services PMI figures are released in Europe today, with Spain and Italy releasing theirs just ahead of the general release for the Eurozone. In contrast to the UK, the outlook is not great - with the expectation being another month of contraction. Get in touch with your trader today for up to the second rates.
The US dollar enjoyed a strong day yesterday as factory orders exceeded expectations to post a second consecutive month of growth in manufacturing. With a bank holiday tomorrow for Independence day, expect volatility to be on the up over the next few days. Eyes will be on unemployment figures released today and Friday with the consensus expectations being cautiously optimistic. The labour market has long been linked with monetary policy in the US and with chatter about the end of monetary easing programs dominating affairs, good news would definitely boost the dollar. Call in now for the latest news and live rates for the US dollar.
Elsewhere, the Japanese yen failed to snap a 5 day trend as the US dollar pushed up through the key 100 mark once again. Strong figures from Japan appear to be having the opposite effect to anywhere else in the world, as markets are treating good news as a sign that ultra-loose monetary policy is working and will not be brought to an end soon. The Canadian dollar slipped to a 20 month low after growth dropped last month, trade balance figures released this afternoon will drive volatility. Overnight we saw Australian retail figures and trade balance data released, but little else is expected to be released throughout the day bar the aforementioned trade balance figures from Canada. Call your trader now for up to the second rates for your currency pair.
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