The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
Sterling looks to be consolidating these gains so far this morning, with GBP/EUR steady at €1.1675 and GBP/USD ticking up to $1.3886. GBP/CAD is flat at C$1.7099, while GBP/AUD and GBP/NZD slide to AU$1.8308 and NZ$1.9572 respectively.
Coming up, will a robust US services PMI help the US dollar to mount a recovery today?
What’s been happening?The pound got off to a solid start this week as Sterling sentiment was bolstered by reopening optimism, as Boris Johnson announced plans to lift all coronavirus restrictions in England from 19 July.
Reinforcing this upside in GBP exchange rates was the publication of the UK’s latest services PMI, with June’s finalised figures being revised up from 61.7 to 62.4.
At the same time, the euro was placed on the defensive on Monday as EUR investors grow increasingly concerned by the spread of the Delta variant of the coronavirus throughout Europe.
This offset the Eurozone’s own PMI release, which reported service sector activity in the bloc struck a 15-year high last month.
The US dollar, meanwhile, was trapped in a narrow range yesterday, as the closure of US markets for the extended 4 July weekend resulted in thin trading conditions in the US currency.
What’s coming up?Looking ahead, today key release looks to be the publication of the ISM non-manufacturing PMI later this afternoon.
June’s release could see the US dollar mount a recovery today, if it reports that growth in the US service sector continues to accelerate, having previous struck a record high in May.
In the meantime, the euro opens today’s session on the defensive after Germany reported a shock contraction of factory orders in May.
This downside in the single currency could be extended, if Germany’s latest ZEW survey reports economic sentiment in the Eurozone’s largest economy continued to deteriorate this month.
In the absence of any notable GBP data releases, the pound is likely to remain influenced by domestic coronavirus developments, with Sterling potentially firming if as more details for this months reopening emerge.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)