Daily FX Trading Update: GBP Awaiting UK Services PMI

The US dollar was able to regain ground in recent sessions, even though data from the US came in mixed. The ADP non-farm employment change printed a meager 156K gain in hiring versus the projected 205K increase, suggesting a possible downside surprise for the NFP. On the other hand, the ISM non-manufacturing PMI rose from 54.5 to 55.7, higher than the consensus at 54.7. For today, initial jobless claims are up for release and a 261K reading is eyed.
The euro consolidated to the dollar and yen but was able to advance against commodity currencies when euro zone data came in mostly in line with expectations. German final services PMI and Italian services PMI both beat expectations but euro zone retail sales fell 0.5% instead of printing the estimated 0.1% uptick. Euro zone banks are closed in observance of Ascension Day today.
The pound was in a weak spot against most of its forex rivals as the UK construction PMI came in weaker than expected. The reading fell from 54.2 to 52.0 to indicate a much slower pace of industry growth. For today, the services PMI is due and a drop from 53.7 to 53.6 is expected, with another downbeat result likely to push the pound lower.
The franc returned some of its recent wins despite the lack of top-tier reports from Switzerland. There are no reports lined up from the Swiss economy today since banks are closed in observance of Ascension Day.
The yen was slightly weaker against its forex peers since Japanese traders were out on a holiday. There are no reports up for release from the Japanese economy today which means that risk sentiment could drive yen pairs around.
Commodity Currencies (AUD, NZD, CAD)
The Loonie was one of the weakest performers as the forest fires in Alberta led to the shutdown of some oil operations in the area. US crude oil inventories rose 2.8 million barrels, which suggests that oversupply concerns are still present. Australian retail sales showed a 0.4% uptick versus the projected 0.3% gain while the trade deficit narrowed from 3.04 billion AUD to 2.16 billion AUD, driven by a 4% gain in exports.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.