US ISM manufacturing in May came out better than expected at 49.6 from 48.6 previous. The EURUSD traded between 1.5487 and 1.5590 yesterday. The dollar is under pressure as risk aversion comes into the market place following Standard & Poor’s downgrades of several investment banks. Furthermore, the Federal Reserve is closely monitoring oil prices, while traders in Europe eye the ECB for any indications of concern over rising commodity prices and its effects on the Eurozone economy.
The British Pound continues to be under heavy pressure following the release of mortgage approval numbers which plunged to the lowest on record at 58k versus 63k previous. With figures like these, the MPC will likely cut rates, keep an eye on inflation and hope for a rebound in the sector.