Pound (GBP) softens despite positive PMI
The pound (GBP) struggled yesterday, despite the UK’s final services PMI printing higher than its preliminary estimate.
Hopes that the US and UK would ratify their agreed trade pact soon also failed to boost GBP, with the British currency unable to hold its own against stronger rivals.
Amid a lack of British data today, Sterling could trade without a clear directional bias.
Euro (EUR) supported by PMI data
The euro (EUR) rose against its weaker peers yesterday after the Eurozone’s final services PMI was revised higher, thereby dragging overall private sector activity out of contraction territory in May.
The common currency also benefitted from its strong negative correlation with the falling US dollar (USD), although the safer euro struggled against riskier currencies amid the upbeat market mood.
Today, the European Central Bank (ECB) decision is in focus. Markets have already priced in an interest rate cut, leaving the focus on the bank’s forward guidance. Could a dovish tilt see the euro slide?
US dollar (USD) slides as data disappoints
The US dollar fell yesterday, with a risk-on mood and weaker US economic data piling pressure on the currency.
Both the ADP employment change figure and the ISM services PMI unexpectedly declined, raising concerns about the US economy and prompting Donald Trump to once again urge the Federal Reserve to cut interest rates.
Looking ahead, the latest US initial jobless claims figure could impact USD today. Will an expected drop in jobless claims help lift the US dollar?
Canadian dollar (CAD) choppy amid BoC decision
The Canadian dollar (CAD) wavered yesterday as investors digested the Bank of Canada’s (BoC) interest rate decision. The bank left rates unchanged but warned that while inflation concerns remain, it could still consider another cut if necessary.
Today, Canada’s latest balance of trade could impact the ‘loonie’. If we see a deepening trade deficit as US tariffs bite, the Canadian dollar could stumble.
Australian dollar (AUD) oscillates amid mixed data
The Australian dollar (AUD) wavered overnight as a decline in Australian exports in April was offset by a positive Chinese services PMI.
New Zealand dollar (NZD) buoyed by risk-on trade
The New Zealand dollar (NZD) managed to trend slightly higher overnight as positive market mood underpinned the ‘kiwi’.
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