Manufacturing Data in Focus

Manufacturing data is in focus for both the pound and the dollar today, while politics remains key.

Previous Day's Market Highlights

The pound rallied Friday morning as Q1 GDP was unexpectedly revised higher in the final estimate. The economy grew at the faster pace of 0.2% than the 0.1% growth initially estimated. Additionally, the Current Account deficit was smaller than projected. This led to a jump in the pound, which made further gains above 1.31 against the dollar and reversed some of the euro’s overnight gains after the EU Summit migration agreement.
 
The euro gained again as data confirmed projections that headline inflation in the Eurozone had hit 2% again for the first time since February 2017. However, core inflation remains subdued at only 1.0%. US Personal Consumption Expenditures edged higher.
 
Monthly Canadian GDP was less slow than forecast at 0.1%, which helped the loonie reverse earlier losses against the pound following the release of UK data.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1311 1.1471 1.1247 1.95%
GBP/USD 1.3181 1.3473 1.3049 3.15%
EUR/USD 1.1652 1.1853 1.1510 2.89%
GBP/AUD 1.7867 1.7981 1.7395 3.26%
GBP/NZD 1.9488 1.9515 1.8905 3.13%
GBP/CAD 1.7364 1.7791 1.7168 3.50%

Today's Market Highlights

A decline in Manufacturing PMI could put pressure on the pound this morning (09:30 BST). An unchanged Eurozone Unemployment Rate could have limited impact on the euro (10:00). In the afternoon, a softer ISM Manufacturing PMI could also threaten the dollar’s strength. Overall, exchange rates may remain around current levels. Overnight, the RBA is expected to keep interest rates on hold at 1.5%.
 
Politics remains in focus as May’s cabinet heads to Chequers Friday to work on a white paper outlining the UK’s Brexit policy. Additionally, markets will keep an eye out for any further US trade developments.
 
Looking ahead, highlights include Thursday’s speech from BoE Governor Carney and Fed Meeting Minutes (Wednesday is the Fourth of July holiday) and Friday’s US jobs report, including the key NonFarm Payrolls and wage growth figures.

Today's Economic Calendar

Time Currency Release Consensus Previous
9:30am GBP Markit Manufacturing PMI (Jun) 54.0 54.4
10:00am EUR Unemployment Rate (May) 8.5% 8.5%
3:00pm USD ISM Manufacturing PMI (Jun) 58.1 58.7
11:00pm NZD NZIER Business Confidence QoQ (Q2) -11%
2:30am AUD Building Permits MoM (May) 1% -5%
5:30am AUD RBA Interest Rate Decision 1.5% 1.5%
5:30am AUD RBA Rate Statement

Caxton