Friday’s fundamental data ended a busy week that predominantly resulted in the US dollar gaining against its peers. Overall the dollar gained 2% against the pound and 1.7% against the euro. The University of Michigan Confidence Survey on Friday afternoon helped consolidate the dollar’s position posting a better than expected 84.1.
Nationwide house prices was the only data from the UK that resulted in a slightly worse than expected rise of 1.9%.
A new month brings with it a new Governor for the Bank of England. Mark Carney takes office as the first foreign appointment to this position in the Bank’s 319 year history. All eyes will be on Carney as he will try to steer the UK’s economy back to health. What reforms Carney will implement will be watched closely as the Government and the Bank of England endeavour to develop more long term and transparent guidance surrounding interest rates and monetary policy.
A very busy week in terms of data this week which includes interest rate decisions for Australia, Europe and the UK (Carney’s first), manufacturing and services data from the UK and Europe and finally the US nonfarm payrolls on Friday.
With Carney’s arrival will inevitably spur some uncertainty for the UK, the pound may well be on the back foot this week and will need the assistance of some positive data to help maintain a level of strength.
We have already seen Spanish manufacturing data post a positive figure this morning, the highest level in fact since April 2011. In fact euro zone manufacturing data came out better than expected at 48.8 against a forecasted 48.7 for June. However the unemployment situation in Europe has worsened, although not as bad as expected. The unemployment rate rose to 12.1% from 12%.
Manufacturing PMI from the UK continued to expand coming in at 52.5 against an expected figure of 51.5 providing support for the pound in early morning trade.
13.58pm – USD – Markit Manufacturing PMI (Jun): Expected to show an expansion to 50.60.
15.00pm – USD – Construction Spending (May): Expected to improve to 0.6%.
15.00pm – USD – ISM Manufacturing PMI (Jun): Expected to expand to 50.5.