Euro tests 10-day lows against British Pound after UK, Eurozone preliminary PMIs

EUR/GBP eases to the 0.8640 area after rejection above 0.8650.
Eurozone preliminary PMIs hint at a significant downturn in business activity in May.
UK services activity also dropped in May, but the manufacturing sector has shown resilience.

Guillermo Alcala FXStreet

The Euro’s (EUR) frail recovery attempt against the British Pound (GBP) has been capped below 0.8660, as the pair retreats on Thursday, testing one and a half week lows below 0.8642 at the time of writing. Eurozone preliminary HCOB Purchasing Manager’s Index (PMI) data has disappointed, while the UK’s business activity seems more resilient amid the energy shock stemming from Iran’s war.

Eurozine's preliminary PMIs for May, released earlier on Thursday, revealed that business activity in the service sector dove to a 63-month low of 46.4, from 47.6 in April, against expectations of an uptick to 47.7. Manufacturing activity slowed down to 51.4 in May, from 52.2 in April, also below the 51.9 expected.

Down to member countries, France’s Composite PMI fell to a 66-month low of 43.5, from 47.6 in April, with the Manufacturing PMI slumping to 48.9 from 52.8 in April, and Services PMI dropping to 42,9 from 46.5 in the previous month. German PMI figures were also negative, with both the manufacturing and services sectors contracting.

In the UK, May’s Preliminary S&P Global PMIs revealed that the services sector fell to contraction levels, at 47.9, from 52.7 in April, against market expectations of a softer slowdown to 51.8. The Manufacturing PMI, on the other hand, remained unchanged from April at expectations 53.7 level, beating expecttons of a moderate slowdown, to 53.0.

Economic Indicator

HCOB Composite PMI

The Composite Purchasing Managers’ Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging private-business activity in the Eurozone for both the manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for EUR.

Economic Indicator

S&P Global Composite PMI

The Composite Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging private-business activity in UK for both the manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the UK private economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for GBP.

AUD/USD remains below 0.7000 amid light trading

AUD/USD fills a modest bearish gap on Monday, but remains below 0.7000 in the Asian session amid holiday-thinned liquidity. The US Dollar attempts a bounce even as US bond yields pull back from multi-year highs, limiting the pair. Moreover, diminishing odds of another RBA rate hike in November cap the Aussie.

USD/JPY hovers above 158.00 amid Japan/ US holiday

USD/JPY extends its range-bound price action into a new week, trading above 158.00 as bulls remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, softer US bond yields keep US Dollar bulls on the back foot and cap the pair's upside. However, geopolitical uncertainties could limit losses for the safe-haven buck amid thin liquidity due to a holiday in Japan and the US.

Gold buyers retain control as the US CPI week begins

Gold is extending its recovery from a two-month low of $4,067 into a new week on Monday, trying to remain above the $4,200 level amid a pause in the US Dollar retreat from an 18-month peak.

Bitcoin reclaims $83,500, Ethereum takes back 50-day EMA, XRP holds support

Bitcoin (BTC) takes back $83,500 on Monday after a sharp correction, with the Crypto King slipping below $81,000 the previous week. Ethereum (ETH) and Ripple (XRP) followed BTC’s footsteps, recovering and reclaiming the $2,500 and $1.400 marks after a pullback last week.

USD/INR drops 1% at open as RBI steps up measures to support Indian Rupee

The Indian Rupee (INR) opens significantly higher against the US Dollar (USD) on Monday. The USD/INR pair falls 1% to near 95.80 as Reserve Bank of India’s (RBI) fresh measures to curb US Dollar demand has brought relief for the Indian currency.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?