Sterling Claws Back Ground, Faces Election Uncertainty

Sterling recovered ground yesterday following an initial dip after the London terror attacks over the weekend. UK Services PMI fell more than forecast but remained about the 50-point mark consistent with industry expansion.

Previous Day's Market Highlights

Sterling recovered ground yesterday following an initial dip after the London terror attacks over the weekend. UK Services PMI fell more than forecast but remained about the 50-point mark consistent with industry expansion.
 
Sterling-euro made gains toward 1.1500. Sterling-dollar regained 1.2900, in part as US services data disappointed. ISM Non-Manufacturing PMI fell from 57.5 to 56.9. Euro-dollar traded above 1.1200. The dollar initially saw support against the euro but eased back in the afternoon.  
 
Final Eurozone and German PMIs were unchanged or better than forecast.
 
The Aussie dollar fell overnight as the Q1 Current Account deficit missed expectations. The RBA kept interest rates on hold at 1.5% as expected, and the Aussie regained some of its earlier lost ground against the pound, pushing back below 1.7300. 

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1470 1.1929 1.1405 4.39%
GBP / USD 1.2926 1.3048 1.2768 2.15%
EUR / USD 1.1269 1.1283 1.0839 3.94%
GBP/AUD 1.7292 1.7652 1.7142 2.89%
GBP / NZD 1.8039 1.8964 1.7990 5.14%
GBP / CAD 1.7387 1.7822 1.7195 3.52%

Today's Market Highlights

Attention remains primarily on the UK’s election on Thursday. Sterling will likely see further volatility as it remains vulnerable to uncertainty. The recent narrowing of polls means the outcome of the election has become far less certain than it initially seemed.
 
The calendar is quieter today. Eurozone Retail Sales are forecast to slow to 0.2% from 0.3% month-on-month and remain unchanged at 2.3% on an annual basis (10:00 BST).
 
In the afternoon, the Global Dairy Trade Price Index and Canada’s Ivey PurchasingManagers Index (15:00 BST) will be in focus.
 
Overnight, a forecast slowdown in Q1 Australian GDP could weigh on the Aussie dollar. 

Today's Economic Calendar

Time Currency Release Consensus Previous
10:00 EUR Retail Sales YoY (Apr) 2.3% 2.3%
10:00 EUR Retail Sales MoM (Apr) 0.2% 0.3%
NZD Global Dairy Trade Price Index 3.2%
15:00 USD JOLTS Job Openings (Apr) 5.650M 5.743M
15:00 CAD Ivey Purchasing Managers Index (May) 62.0 62.4
02:30 AUD GDP YoY (Q1) 1.5% 2.4%
02:30 AUD GDP QoQ (Q1) 0.2% 1.1%