Yesterday was the final day of June as well as the end of Q2 2020. FX market volatility picked up as participants and businesses squared off their books. One noticeable theme was an increase in demand for sterling. The currency held the previous day’s lows and managed to regain some of its recent losses.
The pound held Monday’s lows of €1.09 and $1.2250 against the euro and pound, respectively, and proceeded to forge a respectable bounce. As US traders and dealers began to arrive at their desks for the day, around lunchtime for Europeans, sterling encountered a jump in demand which saw it move back above €1.10 and $1.2350. The gains could be nothing more than a simple rebalancing of books after a week or two of sterling weakness, but it gives the bulls something to cheer about heading into a fresh month and quarter.
With every new month comes a new set of data for investors to analyse. Today will provide many key releases for the market to interpret and react to. Firstly, global manufacturing PMIs will begin to print from the early morning onwards. European numbers will cross the wires first, the UK’s print is expected to be above the 50 mark, indicating expansion. At lunchtime the US will provide a snapshot of private sector employment for the month of June. 3 million jobs are expected to have been created last month. Lastly, the evening will host the latest set of Federal Reserve meeting minutes from their recent gathering in mid-June.
Written by Viv Savani. 8:45am, July 1st 2020
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