Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

Forex snapshot

The pound is broadly unchanged versus the US dollar ahead of the services PMI report at 9.30am. The euro has been range-bound for the past three trading sessions, as volatility is low.

GBP/USD currency
Source: Bloomberg

Sterling awaits services figures

The pound is trading at $1.6855. As Alastair McCaig stated, due to dollar strength the pound has lost a lot of ground in recent weeks. Traders are expecting a reading of 58.1 in July for the services PMI report, which could set the tone for the Bank of England meeting on Thursday. Mark Carney’s language in the statement will be the focus of the week. The debate continues; which country will be the first to increase interest rates?

I don't anticipate the pound to drop below the $1.68 mark even if the services report misses expectations. A strong report could push the pound to $1.6929.

GBP/USD chart

Euro remains within tight range

The euro is trading at $1.3416. Traders are looking ahead to the eurozone retail sales announcement at 10am (London time). The consensus is for an increase of 0.4% in June. The highlight of this week will be the European Central Bank rate decision and press conference on Thursday, at 12.45pm and 1.30pm (London time) respectively.

No change to the interest rate is expected, but the press conference may give us an indication of what Mario Draghi is thinking. I suspect Mr Draghi will discuss the tools available if required, which could drive the euro towards $1.3380.

EUR/USD chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts