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UK Manufacturing PMI Weighs On The Pound

UK Manufacturing PMI Weighs On The Pound

Data theme for the day was manufacturing PMIs, and in the UK, the much lower-than-expected read of 48.2 underlined the impact of Brexit to underpin expectations of a BoE move on Wednesday. A range of measures have been touted to weigh on the pound again, but despite the move back under 1.3200, we are again seeing little traction developing against the USD or the EUR.

From the USD perspective, Friday’s weak US GDP stats can perhaps justify this to a degree, underlined by the softer-than-expected ISM manufacturing index, with the employment component falling below the 50 mark. This is keeping EUR/USD bid – as the primary USD (selling) route – with the likes of AUD and NZD also giving back some of Friday’s gains, but also to a modest degree.

Looking ahead, we have the RBA meeting to negotiate, but with a rate move now evenly balanced, the pullback is a modest one as yet, with a spike anticipated if they stand pat on rates.

It was a very quiet one for USD/JPY, but despite finding buyers from 102.00, there seems to be little momentum as yet to move significantly away from this level – staying below the 102.50 mark throughout the European session.

USD/CAD is once again pressed higher on weak oil prices, though unconfirmed Genscape reports of a 60k build at Cushing gave WTI a very brief lift. Oil specs look intent on pushing the light crude through $40.00 a barrel, and this may well see USD/CAD back at the recent highs, eyeing a return through 1.3100 late in the day.

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