GBP/USD Tests One-Week Highs

Sterling-dollar hit its highest levels since 27 June this morning.

Previous Day's Market Highlights

The pound received some support in the morning as UK Construction PMI jumped and MPC Member Saunders, one of the committee members who had previously voted for a rate hike, said that rates may need to “rise a little faster”. Sterling-euro continued to trade around 1.13. Sterling-dollar tested 1.32 in the morning session as the dollar softened but met resistance in the afternoon. Euro-dollar met resistance ahead of 1.1675.
 
Other data releases largely surprised to the upside. While Eurozone Retail Sales disappointed, the Producer Price Index accelerated to 0.8%. Canadian Markit Manufacturing PMI jumped from 56.2 to 57.1. US Factory Orders rebounded 0.4% after last month’s 0.4% decline. US WTI Crude hit $75 a barrel yesterday for the first time since 2014.
 
Overnight, the Aussie strengthened on a higher, if below forecast, trade surplus and a surprise to the upside in Retail Sales.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1321 1.1471 1.1247 1.95%
GBP/USD 1.3223 1.3473 1.3049 3.15%
EUR/USD 1.1680 1.1853 1.1510 2.89%
GBP/AUD 1.7839 1.7981 1.7472 2.83%
GBP/NZD 1.9499 1.9622 1.8925 3.55%
GBP/CAD 1.7358 1.7791 1.7168 3.50%

Today's Market Highlights

Sterling-dollar has traded back up around 1.32 this morning, having hit its highest levels since 27 June. The rate has held below 1.33 since 22 June.
 
The US celebrates the Fourth of July holiday today. Overall, it’s another light calendar day, with the sole exception the UK’s Services PMI (09:30 BST). This may provide little interest if there is no change in the index, as forecast, but poses a downside risk should the release disappoint. Given the holiday in the US and corresponding lighter calendar and market liquidity, exchange rates may again remain around current levels.
 
On Friday, we have the key US jobs report, which often sees market volatility. Of particular interest are the NonFarm Payrolls and Average Hourly Earnings figures.

Today's Economic Calendar

Time Currency Release Consensus Previous
24hr USD Independence Day
9:30am GBP Markit Services PMI (Jun) 54 54

Caxton