Dollar Forex Market Remains Lower Ahead of ISM Data
- Both GBP & EUR Gain as Dollar Stays Down
- Focus Moves to Manufacturing PMIs
- Markets Flat but Oil Prices Could Surge
A busy week in the forex market for important data releases kicks off today with the ISM Services PMIs in the US. This could move the Dollar which has been moved into a weaker position following the NFP numbers that beat expectations last week. At the same time, this has provided a tailwind for both the Pound and Euro to pick up some strength that they have badly needed. Wall Street looks set to open a shorter week than usual with little movement, though oil prices will be closely watched after OPEC+ talks on output levels were called off.
Pound Strengthens on Reopening Progress
Sterling has seen positive movement from those forex trading the currency with optimism as they move closer to a full reopening and removal of all COVID-19 restrictions that had been in place. This day which has been once delayed has been referred to as “Freedom Day” and is now scheduled for July 19th despite continuing concern over the number of coronavirus cases in the country.
A weakened USD following the NFP numbers beat at the end of last week has also come at a good time for the Pound in particular. This weakness has been exploited as many look past the COVID concerns to a strong economic reopening. The GBP/USD is looking above 1.39 for the first time recently after a period of downward movement. On upbeat PMIs, the Euro has also managed to take advantage of some declining Dollar strength to approach the 1.19 level.
Data to be a key Driver Through This Week
There are several important data releases to come this week which forex brokers are certain will see movement in the market one way or another. The first of these is the US ISM Services PMIs. These are anticipated to come in at 63.5 for June, a decline of 0.5 on the previous month.
Any deviation from these expectations could spark a movement in the Greenback with an upside beat certain to prompt more pressure on the Fed to consider an about-turn of policy on inflation. They too have a key data release coming on Wednesday when FOMC meeting minutes will be released.
Oil Prices Closely Watched
The OPEC+ group as they are often referred remains at an impasse over production increases which had been proposed. An increase of around 2 million barrels per day between August and the end of the year had been voted on. This was rejected by the UAE who remain against the idea.
This has led to the meeting being abandoned and oil prices left in limbo over the weekend. The expected result could see at least a short-term spike in prices at least until the output issues are resolved. Some analysts feel this may push prices as high as $100 per barrel.