British Pound Lifted by Services PMI Data

Market Reviews

The US dollar held steady against major currencies in thin trade with US markets closed for the July 4th holiday. The euro was slightly lower, with EUR/USD slipping 0.13% to 1.1642. The single currency is trading as the weakest one for today.

The British pound strengthened, with the GBP/USD pair up 0.11% to 1.3209. The pound found support after data showing that activity in the UK service sector accelerated at the fastest pace in eight months in June. The report added to signs that the economy rebounded in the second quarter and kept the door open for an August rate hike by the Bank of England. The UK services PMI rose to 55.1 in June and exceeded economists' average forecasts of 54.0.

Australian dollar was supported by positive economic data from Australia and China. Australia trade surplus on goods and services widened to AUD 0.827B in May, below expectation of AUD 1.21B. Exports rose 4% mom to AUD 33.562B. Imports rose 3% mom to AUD 34.735B. China Caixin PMI services grew to 53.9 in June, up from 52.9 and beat expectation of 52.7.

Eurozone services PMI rose to a four-month high of 55.2 in June from 53.8 in May. Germany PMI services was revised up to 54.4 in June, from initial estimate of 53.9 and hit a 4-month high. France PMI services was revised down to 55.9, from 56.4 in June, but up from May’s 54.3. PMI composite rose to 55.0, up from May’s 54.2. Italy PMI services rose to 54.3 in June, up from 53.1 and beat expectation of 53.3.

The ongoing trade conflict between the US and China remains the main theme on the markets. Investors are concerned that the dispute may soon disrupt a rare period of synchronous global growth. At the end of the week, Washington intends to introduce tariffs for goods from Beijing worth $34 billion. After that, it is expected that China will respond with its tariffs on US products.