GBP: Sterling starts the week well
EUR: Euro strength following positive French PMI data
USD: Dollar down across the board yesterday
Sterling
The pound started the week well advancing against nearly all its major currency pairs throughout yesterday. GBP/USD peaked overnight reaching its highest level since 18th June.
GBP’s optimism came from anticipation that Boris Johnson will announce the 2 metre social distancing rule will be reduced to 1 metre today which will pave the way for pubs and restaurants to re-open on 4th July. This will be a huge boost for the hospitality industry which has been shutdown since 23rd March when the lockdown began. The PM is due to speak in the House of Commons at 12.30pm where creating ‘air bridges’ between countries to boost the tourism industry is also expected to be addressed.
Further positive news surrounding the Coronavirus pandemic included the UK recording its lowest daily figure of cases and deaths since lockdown began. Shielded people can create their own ‘bubble’ from 6th July, with all their other restrictions being lifted from 1st August.
At 9.30am preliminary PMI data for the UK is released. Services is expected at 40, following May’s reading of 29, and Manufacturing is expected at 45, following May’s reading of 40.7. At 9.45am Bank of England Governor, Andrew Bailey, is due to speak.
Euro
The euro was also up for the day against the majority of its majors, but not GBP. EUR/USD gains have continued into this morning following the French PMI figures for Services, Manufacturing and Composite released at 8.15am all above expectations and above 50, which signals growth.
All eyes will be on Eurozone PMI at 9am. Services is expected at 41, following May’s reading of 30.5, Manufacturing is expected at 44.5, following May’s reading of 39.4 and Composite is expected at 42.4, following May’s reading of 31.9.
USD
The dollar was down yesterday against all its major pairs apart from JPY. Reasons for dollar weakness include Trump’s Chief Trade Advisor, Peter Navarro, saying phase one of the trade deal between US and China was over as well as worse than expected US Existing Home Sales data.
At 2.45pm preliminary PMI data for the US is released. Services is expected at 46.5, following May’s reading of 37.5, Manufacturing is expected at 48, following May’s reading of 39.8 and Composite has no projected figure but May’s reading was 31.9. At 3pm US Richmond Fed Manufacturing Index for June expected at -41, following May’s reading of -27, and US New Home Sales for May expected at 0.64 M, following May’s reading of 0.623.
Have a great day and please take care.
