Most dollar pairs were stuck in FX Trading consolidation at the start of the week, as most traders were still off on a May Day holiday and there were no major reports printed. Today has the US ISM non-manufacturing PMI on tap and analysts are expecting to see a dip from 56.5 to 56.2, reflecting a slower pace of expansion in the services industry. Another weaker than expected reading could force the dollar to return more of its recent gains.
The euro was able to hold on to its recent wins against its FX trading rivals, as data from the euro zone came in mixed. Spain’s manufacturing PMI fell from 54.3 to 54.2 instead of improving to 54.6 while Italy’s manufacturing PMI climbed from 53.3 to 53.8. In France, the final manufacturing PMI reading was downgraded from 48.4 to 48.0, reflecting a sharper contraction in the industry. Germany’s final manufacturing PMI was upgraded from 51.9 to 52.1 while the region’s final PMI reading was also increased from 51.9 to 52.0. The Spanish unemployment change report and EU economic forecasts are lined up for today.
FX Trading News
The pound slid slightly lower in recent FX trading, as traders continued to price in weak figures for the PMI releases and downbeat expectations for the upcoming elections. The construction PMI is due today and a drop from 57.8 to 57.6 is expected, with a weaker than expected result likely to push pound pairs much lower.
The franc moved sideways to the dollar but was able to advance against some of its FX trading counterparts, as the Swiss manufacturing PMI fell slightly below expectations. The reading was unchanged at 47.9, lower than the projected 48.2 figure, indicating that there wasn’t much improvement in the industry last month. There are no reports due from Switzerland today.
The yen continued to give up ground to the dollar in yesterday’s FX trading sessions, although Japanese traders were off on a holiday. There are no reports due from Japan today since banks are still closed for the holiday, leaving risk sentiment in the driver’s seat of yen pairs’ price action.
The comdolls consolidated at their current FX trading levels, waiting for the top-tier events this week. The RBA is set to announce its monetary policy statement today and possibly cut interest rates from 2.25% to 2.00% as they hinted at in their previous meeting minutes. Later on, New Zealand will report its employment change and dairy auction figures, with weak readings likely to spur more losses for the Kiwi. Canada’s trade balance is also lined up today.
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