Service Sector PMIs Put the EUR and the Pound in Focus

Earlier in the Day:

It was a relatively busy start to the day on the economic calendar this morning. The Aussie Dollar and the Japanese Yen were in action, with economic data from China also in focus.

For the Japanese Yen

Finalized service sector PMI numbers were out in the early hours.

In June, the Services PMI rose from 46.2 to 48.0, which was up from a prelim 47.2.

According to the June Survey,

• Activity and incoming business experienced further contractions as a result of restrictions to curb the spread of COVID-19.
• Both rates of declines eased from May, however.
• New export orders fell at the softest pace since January 2020.
• Firms remained optimistic, with the degree of optimism rising to the highest level since March.

The Japanese Yen moved from ¥111.165 to ¥111.160 upon release of the data. At the time of writing, the Japanese Yen was flat at ¥111.050 against the U.S Dollar.

For the Aussie Dollar

Building approvals and retail sales were in focus this morning.

In May, building approvals slid by 7.1%, following a 5.7% decline in April. Economists had forecast a 5.5% decline.

More significantly, however, retail sales rose by 0.4% in May, which was up from a prelim 0.1% increase.

According to the ABS,

• Food retailing rose 1.1%, supported by a 1.9% increase in supermarket and grocery store sales.
• Cafes, restaurants, & takeaway food services recorded a 0.7% increase in the month, with department store sales also on the rise.
• Household goods retailing fell by 1.1%, with clothing, footwear, & personal accessory retailing unchanged.
• Retail sales increased by 7.7% compared with May 2020.

The Aussie Dollar moved from $0.75184 to $0.75168 upon release of the figures that preceded data from China. At the time of writing, the Aussie Dollar was down by 0.07% to $0.7521.

From China

The services sector was in focus this morning.

In June, the Caixin Services PMI fell from 55.0 to 50.3 in June, which was worse than a forecasted decline to 55.0.

According to the June Survey,

• A pickup in COVID-19 cases and reduced travel weighed on demand.
• Both business activity and new orders rose at the slowest pace in 14-months.
• Operating expenses only rose slightly in June, while prices charged fell for the first time since July 2020.
• Employment levels across the sector fell for the first time in 4-months.

The Aussie Dollar moved from $0.75168 to $0.75185 upon release of the figures.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.01% to $0.7025.

The Day Ahead

For the EUR

It’s a busy day ahead on the economic data front. Service sector PMIs for Italy and Spain will draw interest in the early part of the European session.

Finalized PMIs from France, Germany, and the Eurozone will also be in focus. Barring marked revisions from prelim figures, however, expect Italy, Spain, and the Eurozone’s PMIs to be the key drivers.

At the time of writing, the EUR was down by 0.04% to $1.1860.

For the Pound

It’s a quiet day ahead on the economic calendar. June’s finalized service PMI will provide direction later today.

With the UK government struggling to contain the spread of the Delta variant, expect any revisions to influence.

Away from the economic calendar, updates on any government plans to ease lockdown measures will also provide direction.

At the time of writing, the Pound was up by 0.04% to $1.3829.

Across the Pond

There were no stats due out of the U.S, with the U.S markets closed today.

At the time of writing, the Dollar Spot Index was up by 0.10% to 92.320.

For the Loonie

It’s a particularly quiet day ahead on the economic data front. There are no material stats to provide the Loonie with direction. A lack of stats will leave the Loonie in the hands of market risk sentiment on the day.

At the time of writing, the Loonie was down by 0.10% to C$1.2334 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.