Aussie PMIs down, GBPAUD at AUD 1.90

Australia’s manufacturing and service sectors lost a little confidence in the latest purchasing managers indices. In fact, the service sector index was down to 43.3, the worst we have seen since June 2020. Unsurprisingly, the GBPAUD rate is higher this morning, above AUD 1.90 in fact. It even touched AUD 1.9150 overnight. There is so much uncertainty over the Aussie lockdowns and the impact of slowing Chinese demand that we may yet see higher levels in this pair.

Sterling faces PMIs for services, manufacturing and a composite one today. The forecasts are very mixed, so there is scope for volatility in early UK trade. GBPUSD starts the day a little higher at $1.3650 but it is a fairly flat Pound on most other fronts.

PMIs everywhere today

The Eurozone is also due to a wave of PMI releases this morning. Like the UK versions, the eurozone manufacturing, service sector and composite PMIs are due out. The consensus is that we will see a slight slowdown in the recent rise in optimism. GBPEUR starts Monday at €1.1650 or thereabouts. That is above the €1.16 level and therefore, still in an upward trend that has been in place since September 2020. This afternoon’s EU consumer confidence index is forecast to be pretty bad, so a continuation of that upward trend may well be on the cards.

It is PMIs all around because we will see the US versions this afternoon. Those will be accompanied by existing home sales data which should reflect a plateauing of activity.

NZ central bank plans not diverted by recent lockdown

Overnight tonight, we will see New Zealand’s retail sales figures. These are the Q2 numbers which won’t reflect the recent lockdown, so are a little out of date. Currently, GBPNZD is up to, but not above, NZD 2.00 to the Pound. That is a big psychological barrier. Assuming traders are eventually brave enough to boldly go where this pair hasn’t been since August 2020, there will still be resistance at NZD 2.02, which is the peak level in that August month. If the Pound can overcome that resistance, the high in April 2020 was 2.09. That could be exciting for NZD buyers but we have to hurdle 2.00 first. The lockdown of NZ ends on the 27th and the RBNZ’s chief economists don’t see it affecting the central bank’s monetary policy plans.

And on this day in 79AD, Mount Vesuvius erupted, engulfing Pompeii and Herculaneum. It wasn’t until full excavations took place 1,669 years later that the perfectly preserved Pompeii society was uncovered.

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