Euro, sterling stronger on PMI readings

Story link: Euro, sterling stronger on PMI readings

The US dollar was weaker on Monday as both the euro and sterling saw gains on the strengths of their respective Purchasing Managers’ Index data for June. The Eurozone Purchasing Managers’ Index was up to 55.6 in June after a reading of 55 in May. Meanwhile, the UK PMI showed that input prices were at their highest level in 9 months in June. While output prices were down a bit, they remained at high levels. The European Central Bank and the Bank of England are both scheduled to meet to discuss interest rates this week, and while the ECB is expected to hold rates steady this month the new PMI data is expected to add to the chances that there will be another rate hike in the Eurozone this year. The Bank of England is widely expected to raise interest rates when its Monetary Policy Committee meets. Both rate decisions are expected on Thursday.

Sterling was at $2.0169 in relation to the US dollar, its highest level against the greenback in 26 years. The UK currency managed to overcome concerns raised by the weekend attack at the airport in Glasgow and two attempted attacks at the end of last week in London. Meanwhile, the euro traded at $1.2629 in relation to the dollar after going as high as $1.3637 earlier in the session, very near its all-time high versus the US currency, reached on April 27. The dollar was also lower versus the yen, trading at ¥122.18. The declines for the dollar came even though the Institute for Supply Management’s index of manufacturing as at 56 for June, more of a gain than expected and above May’s reading of 55.