United States Dollar: UK manufacturing data printed slightly weaker than market expectations yesterday. The index for May came in at 52.0 vs. expectations for 52.7 and although it only missed slightly it saw the pound come under selling pressure throughout the morning. GBP/USD fell to 1.5199 on the news, pressured further by sales in EUR/USD. The pair recovered a little in advance of the 3 0’clock data from the U.S. but as soon as ISM Manufacturing PMI printed at 52.8 vs. 51.9 and Construction Spending came in strong, dollar strength took hold again and GBP/USD slipped to an eventual low of 1.5174. It remains on the back foot this morning and opens in London at 1.5215 ahead of UK Construction PMI and mortgage data at 9:30am. There’s a bit of data – although not much – from the States this afternoon.
We expect a range today in the GBP/USD rate of 1.5150 to 1.5300
Euro: Data from the Eurozone yesterday morning was generally strong; German inflation numbers were slightly stronger across most regions, Spanish, Italian, French and German manufacturing PMIs were all above or as expected. EUR/USD however was unmoved and only started to make gains as New York came online. It traded to a high of 1.0978 before U.S. data pushed the pair to a low of 1.0885. Meanwhile, investors continue to sense that a Greek deal is getting closer although that’s unlikely to have caused the euro’s recovery this morning – it trades at 1.0970 currently. There are reports coming in that Greek lenders are preparing a “take it or leave it” proposal although this could just be another one of those rumours. EUR/GBP buying is providing a lot of the support and its back up to .7215 (or 1.3860).
We expect a range today in the GBP/EUR rate of 1.3835 to 1.3910
Aussie and Kiwi Dollars: The RBA left rates on hold overnight at 2% but it was hardly a surprise. AUD/USD has rallied on the back of the announcement, as there was a slight risk of a cut – it gapped from .7625 to .7675 and went on to trade to an eventual overnight (or early morning) high of .7705. Australian GDP data is up next – its due overnight – and upward revisions are already being made by various big names. NZD has been steadier by comparison and NZD/USD trades at .7108 currently, this after falling to a low of .7080 towards the end of the London session yesterday.
We expect a range today in the GBP/AUD rate of 1.9700 to 1.9845
We expect a range today in the GBP/NZD rate of 2.1250 to 2.1450
AUD: AIG Services Index, GDP q/q
EUR: CPI Flash Estimate y/y, Core CPI Flash Estimate y/y
GBP: BRC Shop Price Index y/y
NZD: GDT Price Index, ANZ Commodity Prices m/m
USD: Factory Orders m/m, IBD/TIPP Economic Optimism, Total Vehicle Sales
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