Disappointing figures from UK/EU support the USD

Jarratt Davis

Special Consultant to the FPA
Sentiment update for the New York trading session, 3rd May 2018

During today's London session, the main events were UK services PMI and EU Flash CPI for April.

UK Services PMI remained in expansionary territory but missed expectations at 52.8 versus market consensus of 53.5.

Following the report, GBP initially weakened with GBPUSD falling back below the 1.36 handle although the reaction has been relatively contained.

EU Flash CPI was also disappointing with both the headline and core missing expectations.

Flash CPI Y/Y printed at 1.2% versus consensus and prior of 1.3% while Flash Core CPI printed at 0.7% versus consensus of 0.9% and prior of 1.0%.

Consequently, EUR has remained pressured with EURUSD firmly back below the 1.20 handle after breaking above the handle earlier in the London session.