Thursday 2nd July 2020
IFX market report
The pound gained a cent on the US dollar yesterday and made up marginal ground on the euro, as encouraging data Stateside stilted safe-haven demand and a usually innocuous UK Manufacturing survey offered some encouragement.
The Purchasing Managers Index survey for June came in at 50.1, in line with a forecast from economists and up from 40.7 in May. Significantly, the move above the 50 mark shows growth for the first time since February.
Ever-present Brexit concerns continue to anchor sterling.
There is no economic data due for release today.
GBPUSD opened at 1.2391, closing at a day high of 1.2488
GBPEUR opened at 1.1032, closing at a high of 1.1084
The US dollar softened yesterday after manufacturing activity rebounded more than expected in June, with the activity index by the Institute for Supply Management hitting its highest in 14 months, as firms and businesses resumed operations. Whilst good news for the US economy, risk appetite increasing as a result and dampened demand for the safe-haven dollar.
More keenly anticipated employment reports from the government later today, ahead of a US public holiday tomorrow, are forecast to show an increase of 3 million non-farm payrolls in June.
Meanwhile, California dramatically reversed efforts to reopen its economy on Wednesday, once again banning indoor restaurant dining in much of the state, closing bars and ramping up enforcement of social distancing and associated measures.
Following the trend, France and Germany yesterday posted data pointing to a recovery in manufacturing activity. Against a softer US dollar, the single currency made a 0.3% gain, but slipped versus the pound.
This morning’s Spanish unemployment claims data was expected to drop by 113k, but has disappointingly revealed another 5k out of work.
EURUSD opened at 1.1232, closing at 1.1266