The Euro was given very little direction after Thursday’s European Central Bank announcement, with President Mario Draghi announcing no changes to monetary policy and giving little signalling about potential stimulus at the September meeting.

Attention was on Friday’s Eurozone industry PMI reports with expectations of seeing steady growth, despite Britain’s shock referendum result. Weaker-than-expected PMI results could mean the Euro stays in a trading range below its 200-day moving average of $1.1078 versus USD.

Sterling

The technical and fundamental indicators behind Sterling appear at odds this week, ahead of the high-profile UK service sector PMI survey report yesterday – the first look post-Brexit at Britain’s leading industry, one that makes up almost 80 per cent of UK growth. UK manufacturing data is also due.

Markets expect a sharp decline in today’s PMI reports, ahead of next week’s UK GDP estimate for Q2. So it will be interesting to see if the Pound’s technical recovery still continues and opens up the €1.20-€1.22 range against the Euro, or if poor UK economic data drives Sterling back. This month we’ve seen a GBP/EUR range of four per cent from €1.21 to €1.16.

US dollar

Stronger-than-expected US economic data in July, from non-farm payrolls jobs growth to consumer spending, means we must start thinking ahead to what hawkish messaging we may get from the Federal Reserve at its meeting next week.

The expectation is firmly for no US rate hike and some signalling that a September hike could happen if US data improves. US Q2 GDP is then due on July 27 and a solid rise could revive the stronger US dollar story and keep the GBP/USD rate depressed near $1.30 and EUR/USD around or below $1.10.