The dollar climbed higher as the euro fell Monday morning. Meanwhile the pound got a boost from growth in the U.K. services sector. The Aussie dollar took a hit from its central bank. All this on the backdrop of trade uncertainty and next week’s U.S.-North Korea summit.
EUR/USD retreating to last week’s lows
The EUR/USD pair is reaching back lower to 1.166, inching closer to the lows of 1.165 on Friday. Geopolitical uncertainty is pulling down the pair as the U.S. ISM PMI data is on the horizon this morning.
The dollar was able to advance against the pound and Japanese yen overnight, but is falling against the currencies this morning as trade and political concerns return to be focal points.
USD/JPY touched 110.0 earlier in the day and since dropped to 109.6 as investors look to the safe-haven yen.
Services sector spikes sterling
The pound got a boost from the U.K. services sector this morning, which showed stronger growth for the month of May.
The Markit services purchasing manager’s index came out at 54.0, compared to 53.0 expected. This is the second day in a row of positive data from the U.K. after the construction PMI surprised on the upside Monday.
GBP/USD was trading around 1.330 early Tuesday and then jumped to near 1.338 after the services sector news. The pair has dropped a bit as geopolitical concerns loom.
The business community in the U.K. is also growing tired of the Brexit negotiations and wants answers on what the future looks like so they can prepare. This is according to reports of Prime Minister Theresa May’s meeting with U.K. business leaders on Monday. The leaders discussed immigration and the need to keep the doors open for global talent.
Time set for Trump-Kim meeting
The much talked about summit between President Trump and North Korean leader Kim Jong Un is moving forward after a couple weeks of back and forth.
The discussions will begin at 9 a.m. Singapore time on June 12, which is 9 p.m. EST June 11.
Results of the meeting, either a deal or walking away still unaligned on North Korean denuclearization, could impact the markets. A deal would likely have larger impact on markets, opening up the region for more trade.
Aussie dollar hit by RBA
The Australian dollar took a hit from its central bank’s dovish monetary policy statement last night.
The Reserve Bank of Australia held rates steady at 1.5% and said there was no “strong case” to adjust its monetary policy since inflation and wages remain sluggish.
The AUS/USD was trading as high as 0.766 Monday, but started a decline before the RBA statement. The pair has steadily declined this morning and trades around 0.760.