- Private sector employment in the US increases by more than 100K in June.
- PMI report shows UK’s service sector struggles to expand in June.
- BoE’s Cunliffe says risk of no deal Brexit and no transition has gone up.
The GBP/USD extended its slide for the third straight day on Wednesday and slumped to its lowest level in two weeks at 1.2556. With the trading action turning subdued in the American trading hours ahead of the Independence Day holiday, the pair staged a small rebound and was last seen trading at 1.2578, losing 0.12% on a daily basis.
Earlier today, the data published jointly by the IHS Markit and the UK’s CIPS showed that the business activity in the service sector in the UK stayed virtually flat in June with the Services PMI coming in just a little above the 50 threshold. Commenting on the data, “The near-stagnation of the services sector in June is one of the worst performances seen over the past decade and comes on the heels of steep declines in both manufacturing and construction,” said Chris Williamson, Chief Business Economist at the IHS Markit.
Later in the day, Bank of England (BOE) Monetary Policy Committee (MPC) member and Deputy Governor Cunliffe argued that the risk of a no deal Brexit and no transition had gone up but added that the financial sector was prepared to make it even more difficult for the pound sterling to gain traction.
In the second half of the day, the Automatic Data Processing (ADP) in its monthly publication revealed that employment in the private sector in June increased by 102,000 in the U.S. Although this reading came in better than the previous figure of 41,000, it missed the market consensus of 140,000. Other data from the U.S. revealed that the Markit Services PMI improved to 51.5 but ISM Non-Manufacturing PMI fell to 55.1 from 56.9. Following the mixed data, the US Dollar Index struggled to make a decisive move in either direction and was last seen posting small daily gains at 96.78.
Technical levels to watch for
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