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British pound rallies backed by UK services
On Tuesday, the UK currency managed to gain, hitting the trading session's peak, underpinned by the news that business activity in the UK leading services sector soared stronger than anticipated in May.
The currency pair GBP/USD leapt by 0.48% coming up with a reading of 1.3375 in contrast with the previous outcome of 1.3332.
The UK currency soared in the face of indications of the revival of the UK economy after a recent slowdown provoked by bad weather. Apparently, the new data renewed predictions that the Bank of England could have the interest rate lifted in August.
In May, the index of business activity in the services sector of the United Kingdom edged up hitting 54.0 in contrast with April’s reading of 52.8. Market experts predicted that the value of this index would account for about 52.9. By the way the reading of this index above 50 stands for surge.
Evidently, the improvement in the situation in the services sector happens to be another proof that the British economy is already reviving in the second quarter. Nevertheless, representatives of the companies stressed that uncertainty regarding Brexit still appears to be a major factor, constraining the decisions of customers.
As follows from the report, employment in the services sector of Great Britain displayed the second-lowest surge rate since March the previous year.
The British pound tacked on versus the common currency. The currency pair EUR/GBP went down by 0.42% being worth 0.8747 versus the reading of 0.8781 before the report was uncovered.
Uncovered on Tuesday, data disclosed that business activity in the euro zone speeded down in May. As a matter of fact, the final value of composite PMI index went down to a low of 18 months - 54.1 after the reading of 55.1, recorded in April.
Great Britain will publish its trade balance for April on June 11, at 09:00 MT time.
Canada will publish employment change and an unemployment rate on Friday, at 15:30 MT time.
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.
The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!