Pound Sterling

Pound Strengthens on UK Data, USD Recovery Dents Euro

Pound News: Sterling Supported by UK PMIs

The Pound has strengthened today following the release of the latest PMI data from the UK for May. The services sector saw the fastest rate of output growth for 24 years as the economy continues to recover from the worst of the coronavirus pandemic.

Heading into the weekend, Pound investors will be keeping an eye on any further coronavirus developments to drive movement in GBP as concerns over the Delta variant of the virus and delays to lifting lockdown continue to keep investors cautious.

Euro News: Euro Undermined by US Dollar Rebound

The Euro has weakened today due to a rebound in the US Dollar, with the negative correlation between the pairing weighing on EUR exchange rates. However, limiting losses for the single currency were the latest Eurozone PMIs which saw the fastest growth in the services sector since 2018.

The latest Eurozone retail sales from April could cause EUR exchange rates further losses going into weekend as growth is forecast to have contracted 1.2% in April.

A speech by European Central Bank (ECB) President Christine Lagarde will also be in focus. Investors will be looking for hints into the ECB’s future monetary policy after Eurozone inflation hit 2%, at the top of the central bank’s target range.

US Dollar News: USD Strengthens on Risk-Off Mood

The US Dollar has strengthened today after Philadelphia Fed President Patrick Harker suggested it is time for the Federal Reserve to start thinking about tapering, which could lead to tighter monetary policy.

USD exchange rates received further support from upbeat employment data. The ADP survey revealed job creation unexpectedly jumped to 978,000 in May, and initial jobless claims fell again last week to 385,000.

This afternoon’s ISM non-manufacturing PMI could see the ‘Greenback’ push even higher against its rivals, with service sector activity expected to show another month of strong growth.

Tomorrow will see the release of the latest non-farm payrolls for May which could add another boost to the US Dollar heading into the weekend after the ADP figures suggested the job market is improving.

Canadian Dollar News: CAD Steady as Oil Prices Rise

The oil-sensitive Canadian Dollar has been steady for much of the day as oil prices hit a two-year high, with demand increasing as economies leave coronavirus lockdown restrictions.

Australian Dollar News: ‘Aussie’ Weakens on Disappointing Data

The Australian Dollar has been trending lower today as a risk-off mood and a strengthening US Dollar weigh on the ‘Aussie.’

Economic data releases overnight also weakened AUD exchange rates as Australia’s finalised services PMI was downwardly revised, retail sales slowed, and imports slumped.

Upcoming Data

Friday 4th June

10:00    EU Retail Sales (Apr)

12:00     EU ECB Lagarde Speech

13:30    CA Unemployment Rate (May)

13:30    US Non-Farm Payrolls (May)

13:30    US Unemployment Rate (May)

15:00     CA Ivey PMI (May)