Sterling lost ground against a number of its peers on Monday as investors engaged in a spot of profit-taking and a dearth of UK data gave the Pound little opportunity to move upward. The GBP/USD currency pair moved away from its recent seven-month high and GBP/EUR dipped back below 1.40 amid hopes that Greece is close to reaching an agreement with its creditors. However, the Pound managed to move back above 1.40 on Tuesday in spite of French Services and Manufacturing PMI printing above expected levels. Today’s CBI reports could cause a little Pound movement.
News that the latest reform proposals submitted by Greece to its creditors were found to be more acceptable than previous drafts gave the Euro a bit of a boost at the beginning of the week. However, later reports that the Greek PM has been given just 48 hours to finalise an agreement put the common currency under pressure and it softened against rivals like the Pound and US Dollar in spite of the publication of positive ecostats for the Eurozone’s second largest economy.
Risk aversion lent the US Dollar support on Monday, as did the US Exiting Home Sales report. Sales were believed to have increased by 4.8% on a month-on-month basis in May, but they actually climbed by 5.1%. ‘Greenback’ gains were limited however as the Chicago Fed Net Activity Index disappointed expectations. If today’s US Durable Goods Orders figure shows the -1.0% decline anticipated the US Dollar could edge lower in the hours ahead.
The Australian Dollar posted a modest gain against the Pound during the local session in spite of both the Westpac Leading Index and the Australian House Price Index printing poorly. ‘Aussie’ support came in the form of China’s HSBC Manufacturing PMI, which advanced from 49.2 to 49.6. The measure had only been expected to edge to 49.4.
New Zealand Dollar
The New Zealand Dollar put on a fairly mixed performance on Tuesday, gaining on the Pound and Euro but falling against the US Dollar and Australian Dollar following the publication of China’s Manufacturing PMI. Ecostats for New Zealand are in short supply until Thursday when the nation is set to publish its trade balance figures.
Yesterday morning saw the GBP/CAD exchange rate soften by more than a cent as traders took advantage of the pairing’s recent four-month high. With no Canadian data scheduled for release this week ‘Loonie’ volatility will be the result of global economic developments and commodity price shifts.