Weak data continues to undermine Sterling.

US employment and business confidence data was below expectations which hampered the US dollar with a wider US trade deficit also fuelling trade uncertainties.

Global bond yields continued to decline during the day with US benchmark 10-year yields at 32-month lows.

US equities posted record highs amid expectations of a Fed rate cut and dovish central bank policies

The Euro was hampered by expectations of a dovish ECB policy stance with weak data continuing to undermine Sterling.

The Canadian dollar strengthened after much better than expected trade data and commodity currencies overall made net gains.

The Swedish krona strengthened after the Riksbank maintained its forward guidance. Declining bond yields helped protect precious metals and bitcoin.

The UK PMI services index declined to a 3-month low of 50.2 for June compared with market expectations of an unchanged reading of 51.0 and the composite index declined to below the 50.0 level. New business remained subdued with backlogs declining for the 9th successive month, although employment continued to increase. Input prices increased at a faster pace, but increases in charges were subdued.

The composite index dipped into contraction territory which reinforced concerns over the outlook. Sterling lost ground after the data, but did demonstrate some resilience as GBP/USD held above 1.2550 against the dollar while GBP/EUR found support around 1.1125 as the UK currency recovered some ground later in the session.

Sterling gained some protection on valuation grounds and a more positive tone surrounding risk with hopes that central banks would be able to support the global economy. These expectations helped offset expectations of a more dovish Bank of England policy stance with relative yields not moving against the UK currency despite a decline in gilt yields.

Economic Calendar

Expected Previous
07:30 CHF CPI (M/M)(JUN) - 0.30%
07:30 CHF CPI (Y/Y)(JUN) - 0.60%
08:00 BoC Governor Member Timothy Lane - -
10:00 Euro - Zone Retail Sales (Y/Y)(MAY) 1.50% 1.50%
10:00 Euro - Zone Retail Sales (M/M)(MAY) - -0.40%
23:30 AiG Construction Index(JUN) - 40.4

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.