Today's Highlights
Sterling slipping in spite of inflation uptick
Euro drops on poor construction data
BOE voted 7-2 for unchanged base rate
FX Market Overview
I am writing this a little late this morning after spending 45 minutes stuck on the M25.Don't get me started by the way.
Anyway, yesterday's markets were livened by the slightly upbeat UK inflation data and concerned over the state of the manufacturing output data. That was short lived as far as the Pound is concerned because Sterling has slipped again this morning. The Bank of England Minutes showed a 7-2 vote in favour of maintaining the base rate at the current level. That was entirely as expected so the fall in Sterling has more to do with overall lack of interest rather than a short term knee jerk reaction. Barring any external shocks, traders are likely to hold station until tomorrow's UK retail sales data.
We saw dire construction data from Europe this morning but, such is the overall state of Eurozone data that the news barely shifted the Euro on its axis against either the US Dollar or the Pound. As far as the data goes, that is all we will get today. Traders are likely to settle down ahead of tomorrow's construction and service sector PMI indices.
The rest of the day is quiet on the data front. That is quite handy when you are running late because of a massive queue on the motorway and then an idiot in a lorry decides to block the roundabout.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
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Editors’ Picks
AUD/USD remains firm above 0.6600 ahead of RBA
AUD/USD maintains its bullish bias well and sound on Monday, extending the multi-session recovery past the 0.6600 barrier ahead of the key interest rate decision by the RBA.
EUR/USD keeps the constructive tone near 1.0800
EUR/USD started the week in a positive note amidst the Dollar’s inconclusive price action, altogether motivating the pair to attempt a move to the proximity of the 1.0800 region, where the 200-day SMA also converges.
Gold holds on to modest gains around $2,320
Gold trades decisively higher on the day above $2,320 in the American session. Retreating US Treasury bond yields after weaker-than-expected US employment data and escalating geopolitical tensions help XAU/USD stretch higher.
Bitcoin price holds above $63K as MicroStrategy tops BTC ownership list
Bitcoin (BTC) price recorded a rather bold two days this past weekend in a surge that saw millions in positions liquidated. However, the week is off to a calm start with altcoins sucking liquidity from the BTC market.
Stagflation warning: Service economy contracts as prices rise
In another stagflation warning sign, the U.S. service sector contracted in April even as service prices rose. The Institute for Supply Management's non-manufacturing PMI dropped to 49.4 in April, dipping from 51.4 in March.