Forex news from the European trading session - 4 July 2018
Headlines:
- US MBA mortgage applications w.e. 29 June -0.5% vs -4.9% prior
- China says that the ball is in the US' court on tariffs implementation
- Russia says oil not on the main agenda when Putin meets up with Trump
- UK June services PMI 55.1 vs 54.0 expected
- Eurozone June final services PMI 55.2 vs 55.0 prelim
- Germany June final services PMI 54.5 vs 53.9 prelim
- France June final services PMI 55.9 vs 56.4 prelim
- Italy June services PMI 54.3 vs 53.3 expected
- Spain June services PMI 55.4 vs 56.2 expected
- Riksbank's Skingsley reiterates October or December is still possible for rate increase
- BOJ's Harada says unsurprising if prices rise as jobless rate falls
- CASS sees China 2018 GDP growth at 6.6% - report
Markets:
- GBP leads, EUR lags on the day
- European equities mixed in trading
- Gold up 0.32% to $1,256.74
- WTI crude down 0.42% to $73.82
- Bitcoin down 1.79% to $6,495
It was a quiet start to the day, with the dollar on the back foot in trading for the most part. The aussie led gains to start the session after positive retail sales data earlier and the fact that the Chinese yuan received support from the PBOC overnight leading to calmer tones during the session - despite a drop in equities.
As the session started, the dollar continued to surrender some ground but nothing too major but then the greenback caught a slight bid as trading remained thin jumping up about 20 pips across the board. The move pretty much erased the earlier losses sustained by the dollar and that's where trading has stayed since with the market already in the 4th of July mood.
The euro is weighed lower despite a more upbeat Eurozone final reading for services and the composite prints. Manufacturing remains a drag for the euro and the added relief here won't do much to change that as we move into 2H 2018. EUR/USD traded to a low of 1.1631 on the day, and has stayed near there since.
Cable was one of the more interesting pairs on the day, with sterling following the euro lower initially heading into the release of the June services PMI reading. The data was a beat, and cable was sent higher to 1.3200 levels from a low of 1.3171 and has since settled around the figure level after touching 1.3220 in the last hour.
The bid in sterling is also helping to push EUR/GBP to a low of 0.8800 on the day but the pair has since bounced after touching the figure level.
Other currencies remain fairy unchanged (less than a 0.1% gain/loss) against the dollar at the end of the session with earlier gains being erased as the dollar steadied in thin trading. The market seems already prepared for the holiday mood and with US trading expected to be subdued as well, this feels like a great time for European traders to also bask in the summer mood and for English traders to further celebrate England's win over Colombia yesterday.
To all our US readers, Happy Independence Day!
