Daily Market Report - 04/07/2014

GBP
UK services PMI narrowly missed expectations of 58.1 and posted a figure
of 57.7, but despite it being worse than expected, services which
accounts for roughly 80% of UK GDP posted growth. GBP’s recent strength
continued despite the slightly below forecast figure, with GBP gaining
against a basket of currencies.

USD
Yesterday the Dollar momentarily showed some strength after US non-farm
payrolls surpassed expectations and rose by 288,000 in June. This figure
exceeded the forecast of 214,000 but only temporarily supported the
greenback, with GBP/USD returning to the mornings levels shortly after.

On another positive note, the unemployment rate dropped to 6.1%, which
is the lowest rate since September 2008, the same month that US
investment bank Lehman Brothers collapsed. Economists had expected the
jobless rate to remain unchanged at 6.3%. Despite this positive
fundamental data the Dollar ended up level with its major pairings ahead
of the 4^th of July Independence Day holiday.

EUR
The European Central Bank has left interest rates unchanged across the
Eurozone .The main refinancing rate staying at a record low of
0.15%Banks are still being hit with negative interest rates when they
leave cash at the ECB with the deposit facility rate pegged at
-0.10%.And the marginal lending rate (charged when banks borrow
overnight from the ECB) remains at 0.4%.

During the ECB press conference to discuss these decisions made Mario
Draghi reiterated the ECB’s forward guidance. Essentially that Eurozone
interest rates will remain at present or low interest rate levels for an
extended period. This should keep the Euro currency weak for an
extended period.

Key Announcements:
None

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Daily Market Report – 04/07/2014