Forex Major Currencies Outlook (Jun 06, 2017)

The ISM non-manufacturing PMI slid from 57.5 to 56.5, lower than the projected drop to 57.1. The final services PMI by Markit was downgraded from 54.0 to 53.6 to reflect a weaker pace of expansion as well. Only the JOLTS job openings report is due from the US today.

EUR

The euro was in a weak spot against its peers as final services PMI weren't so upbeat. Most euro zone banks were also closed in observance of Whit Monday. Euro zone retail PMI and Sentix investor confidence data are due today and another round of downbeat results could mean more euro weakness.

GBP

The pound tossed and turned as traders kept close tabs on polls leading up to the elections on June 8. The latest batch showed a bit of a higher lead for the Conservatives, which could mean more political stability and a stronger negotiating front during the Brexit talks. UK services PMI was weaker than expected as it fell from 55.8 to 53.8 versus the 55.1 consensus.

CHF

The franc was still in a weak spot as traders hesitated to put funds in Europe and for fear of SNB intervention. Swiss banks were also closed on Whit Monday so there were no reports out of Switzerland then. There are also no reports due today so franc price action could hinge on market sentiment.

JPY

The yen was able to hold on to most of its gains even as US bond yields recovered. There were no reports released from Japan at the start of the week while today has the average cash earnings figure. A 0.3% uptick is eyed, which would be an improvement over the earlier flat reading.

Commodity Currencies (AUD, NZD, CAD)

Crude oil was under some selling pressure as the rift in the Middle East threatens to make the OPEC deal more challenging to implement. Data from Australia has been mixed, with the AIG services index falling and the MI inflation gauge printing a weaker reading as well. The RBA statement is coming up next and no rate changes are eyed, but the central bank could continue to express caution about employment and inflation. Canada's Ivey PMI and New Zealand's GDT auction are lined up next.

By Kate Curtis from Trader’s Way