Major currencies are in somewhat of a summer lull at present although a heavy data and event calendar for the rest of the week may still give them a new lease of life.
Sterling is still treading water, with markets ignoring Brexit-related news and opinion polls showing that support for a second Brexit referendum is growing while voters seemingly favour remaining in the EU rather than leaving the EU without a deal or accepting the Brexit-deal currently on the table. Markets for now are seemingly focusing on today’s manufacturing PMI release for July and more importantly tomorrow’s Bank of England policy meeting and updated Quarterly Inflation Report.
It’s a big data & event day for the US with ADP private-sector employment and ISM manufacturing PMI data for July due for release and the Federal Reserve holding a policy meeting. The Fed is expected to leave rates on hold today but there are ultimately too many moving parts to ascertain where a range-bound Dollar ends the day. However, market pricing of 42.5bp of Fed hikes for the rest of the year may struggle to rise much given that measures of US inflation were broadly unchanged in June.
