05/07/2018 - UK Posts Positive Services Data

GBP

The pound rose on Wednesday after a survey showing Britain’s dominant services industry gained momentum last month fuelled expectations of a rate rise this summer. After a sluggish start to 2018, the British economy is showing tentative signs of a recovery with surveys this week for the manufacturing, construction and services sectors beating expectations.

That has brought some respite for sterling after weeks of losses caused by worries about whether Britain can secure a deal with the European Union before it leaves the bloc next March. The IHS Markit/CIPS services Purchasing Managers’ Index (PMI) unexpectedly rose to an eight-month high of 55.1 in June, beating economists’ expectations for it to remain unchanged at 54.0.

The pound has slumped recently because of weakness in the economy, a resurgent dollar and fears that Prime Minister Theresa May will run out of time to agree a deal with the EU on the post-Brexit relationship.The pound has weakened more than 6 percent between April and June, its worst quarter since the 2016 referendum vote to leave the EU.

Key Announcements

11.00 – GBP: BOE Governor Carney Speaks
13.15 – USD: ADP Non-Farm Employment Change; Forecast at 190K against previous of 178K
16.00 – USD: Crude Oil Inventories
19.00 – USD: FOMC Meeting Minutes