The US dollar came under renewed selling pressure on Friday after the preferred government measure of inflation, the non-farm payrolls report, revealed that the world’s largest economy had shed a further 125,000 in June. What was particularly disappointing about the report was the weak pick-up in private sector employment, which came in well below expectations. The news sent the greenback to a 6-week against the euro and a 2-month low against sterling.


The euro had already been enjoying a mini-recovery as investors took heart from the smooth expiration of the ECB’s €442bn loan facility, whilst sterling had gained on the back of solid construction industry data. American markets are closed today as a result of the Independence Day holiday, and consequently trading volumes are expected to be relatively thin. Market focus is therefore set to centre on the European session and, in particular, the latest data from the UK’s all-important Services sector.


The remainder of the week will be dominated by interest rate decisions due out from Australia, Europe and the UK. All three Central Banks are expected to keep rates on hold, although it is worth remembering that one Bank of England policymaker, Andrew Sentence, voted for a rate hike at the last time of asking. Persistently high inflation was the rationale behind Sentence’s vote, although most commentators believe that the prospect of fiscal tightening means a tightening of monetary policy remains unlikely.


• United Kingdom
PMI Services

• Euro Zone
Retail Sales
PMI Services