Movement subdued on the 4th of July holiday

Daily Currency Update

June manufacturing activity across the Eurozone disappointed yesterday with major locations Germany and Italy both missing forecast and falling below previous figures. The ISM manufacturing index from the US yesterday afternoon also indicated that the sector is in recession, with few signs of a turn any time soon. The release came in at 46.0, below the 47.1 consensus and weaker the 46.9 reading from May. This is the worst reading since May 2020 and the eighth consecutive reading below 50.00 (the border between growth and contraction). Despite the release, GBP/USD has seen subdued movement in the past 24 hours trading in a narrower range between 1.2670 and 1.2710. A similar narrow movement has been seen between GBP/EUR with the pair bouncing between 1.1625 and 1.1650.

It is a US bank holiday today, with the 4^{th of} July celebrations taking place. Data elsewhere is thin on the ground, with only low currency impact data expected. German trade balance and Spanish unemployment have already been released with both missing expectations and falling below previous figures. Tomorrow we will see European services data early, but the key release will come from the US with the FOMC meeting minutes with the FED expected to emphasize that core inflation is proving to be stickier.