Euro dipped to 7-week lows.

Although there were mixed US developments, the dollar gained ground during Tuesday with US currency support on relative grounds as it posted 3-week highs.

The Euro dipped to 7-week lows amid a lack of yield support and dovish ECB expectations.

Sterling was undermined by political uncertainty and dovish Bank of England rhetoric while commodity currencies lost ground and precious metals retreated.

The Swiss franc maintained a robust tone amid reservations over other major currencies.

Global equities made gains on strong earnings data and expectations of supportive monetary policies.

Crude was boosted by a substantial API inventory draw but failed to hold its best levels. Bitcoin dipped back below the $10,000 level.

Bank of England MPC member Saunders stated that the UK economy is weak and clearly not overheating while Sterling would be pushed lower in a ‘no-deal’ Brexit. Given his traditional hawkish stance, the comments reinforced negative sentiment. The CBI industrial orders survey also declined sharply to -34 for July from -15 which was also well below consensus forecasts and the sharpest decline for three years which will reinforce concerns over the economic outlook.

Bank of England Chief Economist Haldane was slightly more optimistic with remarks that he would be cautious about any monetary easing barring a sharp economic downturn, although he also suggested rate cuts were off the agenda.

As expected, Boris Johnson won the Conservative Party leadership election, although the margin of victory over Hunt was narrower than most forecasts. Markets remained uneasy over a weak government given internal opposition and fears over a ‘no-del’ Brexit continued to sap confidence. GBP/USD dipped to lows below 1.2420 before a slight rally while GBP/EUR was capped near 1.1160 and retreated to around 1.1100 amid wider single-currency losses.

Economic Calendar

Expected Previous
08:15 Markit Mfg PMI(JUL) 50.7 51.9
08:15 Markit Serv PMI(JUL) 51.5 52.9
08:30 EUR German PMI Composite(JUL) 52.5 52.6
08:30 EUR German PMI Services(JUL) 55.4 55.8
08:30 EUR German Manufacturing PMI (M/M)(JUL) 48 47.6
09:00 Euro-Zone PMI Manufacturing(JUL) 48 47.6
09:00 Euro-Zone PMI Composite(JUL) 51.8 52.2
09:00 Euro-Zone PMI Services(JUL) 52.9 53.6
14:45 USD Manufacturing PMI(JUL) 50.4 50.6
14:45 USD Markit Services PMI(JUL) 51 51.5
14:45 USD Markit PMI Composite(JUL) - 51.5
15:00 USD New Home Sales(JUN) 640M 626M
15:00 USD New Home Sales Change(JUN) 1.90% -7.80%
15:30 USD Crude Oil Inventories - -3.116M

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.