Announcement of Next ECB President Leaves Euro Fluctuating

Pound News: Sterling Tumbles on Fresh Fears of UK Recession

The Pound was on the back foot again for much of yesterday’s European session, as Britain’s June services PMI printed near stagnation. This left some analysts anxious that Britain’s economy may have contracted in Q2 2019.

Sterling did recover slightly towards the end of the session as Prime Minister Theresa May warned potential successors to avoid a no-deal Brexit. However, demand for GBP remained limited.

With the week’s most influential UK ecostats having been published already and economic concerns high, Pound investors will likely turn their attention back towards domestic politics tomorrow.

Euro News: EUR Movement Mixed as Lagarde Tapped for Next ECB President

The Euro put on a mixed performance during yesterday’s session, as investors digested the surprise announcement that International Monetary Fund (IMF) Chairwoman Christine Lagarde would succeed Mario Draghi as the next President of the European Central Bank (ECB).

Lagarde is perceived as a continuity candidate who will follow in Draghi’s more dovish footsteps. The muted reaction from the Euro following the news indicated that markets were generally satisfied.

Following mixed Eurozone data earlier in the week, investors are anticipating Eurozone retail sales results due today. If the data impresses it could give the Euro a modest lift.

US Dollar News: Weaker than Expected US Data Keeps Pressure on USD

The Pound to US Dollar exchange rate was able to hold above its worst levels yesterday afternoon as the day’s slew of disappointing US ecostats took a toll.

Multiple key US ecostats were published throughout the day and most of the figures fell short. ADP’s US employment change, May’s trade balance and factory orders, and ISM’s June non-manufacturing PMI all came in worse than expected.

US markets will be closed today to observe the 4th of July bank holiday, so US Dollar investors will be looking ahead to tomorrow’s key US Non-Farm Payroll report from June.

Canadian Dollar News: CAD Bullishness Extended by Canadian Trade Surplus

The Canadian Dollar’s strong-streak has shown signs of slowing in recent sessions, but the resilient currency powered through to fresh post-2017 highs against the Pound yesterday. This was due to numerous factors, both domestic and global.

Stronger prices of oil, Canada’s biggest export, as well as Federal Reserve interest rate cut bets and a surprise surplus in Canada’s trade balance, left the trade-correlated Canadian Dollar buoyant once again.

No notable Canadian data will be published today, but investors may be hesitant to make big moves on the Canadian currency anyway ahead of Friday’s key Canadian job report. A weak Canadian job report on Friday could cause the Canadian Dollar to shed some of its recent gains.

Australian Dollar News: ‘Aussie’ Surges on Trade Developments and Weak US Data

The Australian Dollar surged to its best level versus the Pound since January yesterday and was one of the day’s best performing major currencies.

Alastair Archbold
Currency Trader
T: 01442 892 062