The Dollar Edges Higher

The dollar has recovered some of its Friday losses on Trump's comments. PMIs from the Eurozone and the US are in focus today.

Previous Day's Market Highlights

Given the quiet calendar yesterday, exchange rates remained around familiar levels. Sterling-euro continued to trade around 1.12, while sterling-dollar held around the 1.31 level it had regained on Friday, when the dollar weakened on Trump’s comments, and euro-dollar edged lower towards 1.17.
US data were mixed. The Chicago Fed National Activity Index surprised to the upside, hitting its highest levels since February. On the other hand, Existing Home Sales rose by less than forecast. Eurozone Consumer Confidence beat expectations, holding steady at -6.
MPC Member Broadbent said the BoE could cut interest rates if inflationary pressures ease after QE is unwound. Broadbent also said he doesn’t know whether he would vote for a hike next week and wouldn’t say if he did. The pound was softer around the comments. Prime Minister May’s latest Brexit proposals for the City’s future relationship with the EU were rejected by Brussels ahead of MPs’ summer recess from 24 July.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1213 1.1367 1.1163 1.79%
GBP/USD 1.3075 1.3363 1.2958 3.03%
EUR/USD 1.1659 1.1791 1.1527 2.24%
GBP/AUD 1.7760 1.7959 1.7569 2.17%
GBP/NZD 1.9310 1.9622 1.9155 2.38%
GBP/CAD 1.7246 1.7673 1.7168 2.86%

Today's Market Highlights

The dollar has seen a bid tone this morning while the euro has been softer ahead of the morning’s data, pushing sterling-dollar back below 1.31 and euro-dollar back below 1.17.
Softer Eurozone Purchasing Managers Indices for both the Manufacturing and Services sectors could weigh on the euro this morning (09:00 BST), while a surprise to the upside could instead prove supportive. It’s a quiet day for the UK, while the US has Housing Price Index and Markit PMIs to keep an eye on (14:00, 14:45). A pick-up in the HPI could provide the dollar with some support, while the PMIs are forecast to be little changed and may therefore have a limited market impact.
Overnight, a narrower trade surplus could weigh on the kiwi, while the Aussie could benefit from a pick-up in Q2 CPI.

Today's Economic Calendar

Time Currency Release Consensus Previous
9:00am EUR Prelim Eurozone Markit Services PMI (Jul) 55.0 55.2
9:00am EUR Prelim Eurozone Markit Manufacturing PMI (Jul) 54.6 54.9
2:00pm USD Housing Price Index MoM (May) 0.4% 0.1%
2:45pm USD Markit Manufacturing PMI (Jul) 56.0 56.2
2:45pm USD Markit Services PMI (Jul) 56.5 56.5
11:45pm NZD Trade Balance MoM (Jun) $200M $294M
2:30am AUD CPI QoQ (Q2) 0.5% 0.4%
2:30am AUD CPI YoY (Q2) 2.2% 1.9%
2:30am AUD RBA Trimmed Mean CPI QoQ (Q2) 0.5% 0.5%
2:30am AUD RBA Trimmed Mean CPI YoY (Q2) 1.9% 1.9%