Markets remained relatively flat yesterday as market sentiment remained calm. Better-than-expected PMI data did little to inspire the foreign exchange market but did however provide a slightly more positive outlook in regard to global economic rebounds. The UK Markit/CIPS Manufacturing PMI for July came out exactly as expected at 60.4. Whereas the Eurozone and German figures beat expectations, coming in at 64.8 and 65.9. Across the pond, despite the Markit Manufacturing PMI printing a better-than-forecasted figure of 63.4, the ISM Manufacturing PMI missed expectations – forecasted at 60.9 and coming in at 59.5. It is an exceptionally light calendar today with almost no major data releases.
While losses where not catastrophic, the Pound “stuttered” into August as it made minor losses against the Euro and Dollar. The consensus is that investors are taking their “money off the table ahead of Thursday’s Bank of England policy meeting”, causing the Pound to drop in the meantime. The policy update coincides with the UK Central Banks quarterly Monetary Policy Report, which investors are hoping will give them more clarity on whether the BoE will raise interest rates in 2022. Due to the Sterling sell-off, GBPEUR fell below the 1.17 handle yesterday, and cable was unable to hold on to the 1.39 handle. It is important to note however, going into today’s open both pairs have managed to reclaim their previous losses. GBPUSD trades over 1.39 and GBPEUR over 1.17.
Opening at 1.3894, Cable had a shaky start to August. Despite enjoying a brief spell above 1.39 the pair was unable to sustain that position, and closed Monday at 1.3898.
GBPEUR also suffered a similar fate. Starting Monday at 1.1715 the pair came under heavy selling pressures in the session and dropped into the 1.16 range. The pair closed off the day at 1.1698.
EURUSD in contrast made subtle gains on Monday. The pair opened at 1.1871 and closed at 1.1880.
