Dollar off lows vs. yen after ISM report

The dollar pulled away from session lows against the yen on Monday and hit session highs against the euro after data showed that activity in the U.S. services sector expanded at the fastest rate in five months in July.

During U.S. morning trade, the dollar retreated from session lows against the yen, with USD/JPY down 0.31% to 98.64, after falling as low as 98.28. 

The Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 56.0 in July from a three year low of 52.2 in June.  

Analysts had expected the index to inch up to 53.0 last month.
The increase was largely due to an increase in new orders, with the new orders component of the index rising to 57.7 from 50.8 in June.

The dollar rose to session highs against the euro, with EUR/USD down 0.29% to 1.3240.

Earlier Monday, official data showed that retail sales in the currency bloc fell 0.5% in June and were down 0.9% on a year-over-year basis. The month-on-month decline was the largest since December 2012.

The euro briefly touched session highs earlier after data showed that the euro zone’s services PMI rose to 49.8 in July, from a final reading of 48.3 in June, adding to signs of a recovery in the euro zone.

The dollar remained lower the pound, with GBP/USD up 0.23% to 1.5329 after data showed that the U.K. service sector expanded at the fastest pace in more than six-and-a-half years in July.

The U.K. services PMI rose to 60.2 from 56.9 in June, well above economists’ expectations for a reading of 57.2.

The Swiss franc was lower against the dollar, with USD/CHF climbing 0.26% to 0.9314.

The greenback was mixed against its Australian, New Zealand and Canadian counterparts, with AUD/USD inching up 0.03% to 0.8905,NZD/USD dropping 0.61% to 0.7787 and USD/CAD inching up 0.08% to 1.0401.

The Australian dollar touched three-year lows earlier in the session after official data showing that Australian retail sales were flat in June boosted the likelihood of another rate cut by the central bank. 

Meanwhile, the New Zealand dollar came under heavy selling pressure following reports of milk powder contamination at Fonterra, the world’s largest dairy exporter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% to 82.07. 

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Forex - GBP/USD remains moderately higher after upbeat ISM report

The pound remained moderately higher against the U.S. dollar on Monday, after the release of an upbeat U.S. service sector report, although strong U.K. data continued to support demand for sterling. 

GBP/USD hit 1.5378 during U.S. morning trade, the pair's highest since July 29; the pair subequently consolidated at 1.5332, adding 0.26%. 

Cable was likely to find support at 1.5257, the session low and resistance at 1.5412, the high of July 29. 

In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 56.0 in July from a reading of 52.2 in June, hitting a five-month high.

Analysts had expected the index to inch up to 53.0 last month. 

But the dollar still remained under pressure after Friday’s weaker-than-forecast U.S. jobs data dampened expectations that the Federal Reserve will start to unwind its asset purchase program later this year. 

The pound rose to session highs against the greenback earlier, after a report compiled by Markit showed that the U.K. services purchasing managers index rose to 60.2 in July from 56.9 in June, outstripping expectations for a reading of 57.2. 

“Although an early call on one month’s data, the forward-looking elements from the survey point to a further strengthening of GDP in Q3 as the UK heads towards escape velocity and self-sustaining economic expansion” Paul Smith, Senior Economist at Markit said.

Data last week showed that the U.K. manufacturing sector expanded at the fastest rate in two-and-a-half years in July.

Elsewhere, sterling was higher against the euro with EUR/GBP retreating 0.56% to 0.8637.

The euro came under pressure after official data showed that retail sales in the currency bloc fell 0.5% in June and were down 0.9% on a year-over-year basis. The month-on-month decline was the largest since December 2012.

A separate report showed that the euro zone’s services PMI rose to 49.8 in July, from a final reading of 48.3 in June.

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Dollar broadly lower after U.S. jobs data, pound gains

The dollar was broadly lower against the other major currencies on Monday as Friday’s weaker-than-forecast U.S. jobs data dampened expectations that the Federal Reserve will soon start to unwind its asset purchase program.

During European morning trade, the dollar fell to session lows against the yen, with USD/JPY down 0.62% to 98.34. 

Data on Friday showed that the U.S. economy added 162,000 jobs in July, less than the 184,000 increase forecast by economists.

The dollar was also lower against the euro, with EUR/USD rising 0.14% to 1.3297.

The euro was boosted after data showed that the euro zone’s services purchasing managers’ index rose to 49.8 in July, from a final reading of 48.3 in June, adding to signs of a recovery in the euro zone.

Elsewhere, the dollar fell to session lows against the pound withGBP/USD climbing 0.40% to 1.5353 after data showed that the U.K. service sector expanded at the fastest pace in more than six-and-a-half years in July.

The U.K. services PMI rose to 60.2 from 56.9 in June, well above economists’ expectations for a reading of 57.2.

The dollar slipped lower against the Swiss franc, with USD/CHF losing 0.12% to trade at 0.9282. 

The greenback was mixed against its Australian, New Zealand and Canadian counterparts, with AUD/USD easing up 0.10% to 0.8911,NZD/USD down 0.50% to 0.7796 and USD/CAD sliding 0.11% to 1.0381.

The New Zealand dollar fell to one-year lows following reports of milk powder contamination at Fonterra, the world’s largest dairy exporter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.19% to 81.85. 

Investors were looking ahead to the Institute for Supply Management's non-manufacturing index later Monday, as well as euro zone data on retail sales.

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U.K. services PMI jumps to 60.2 in July, highest since December 2006

Service sector activity in the U.K. expanded at the fastest rate since December 2006 last month, fuelling optimism over the country’s economic outlook, industry data showed on Monday.

In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index surged to 60.2 in July from a reading of 56.9 in June. 

Analysts had expected the index to ease up to 57.2 last month. 

On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.

Commenting on the report, Paul Smith, Senior Economist at survey compilers Markit said, “Although an early call on one month’s data, the forward-looking elements from the survey point to a further strengthening of GDP in Q3 as the UK heads towards escape velocity and self-sustaining economic expansion.”

Following the release of that data, the pound added to gains against the U.S. dollar, with GBP/USD climbing 0.42% to trade at 1.5355.

Meanwhile, European stock markets remained higher. London’s FTSE 100 added 0.35%, the EURO STOXX 50 rose 0.3%, France's CAC 40 gained 0.2%, while Germany's DAX inched up 0.2%.

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European stocks higher after Spain, China PMIs; Dax up 0.25%

European stocks were higher on Monday, supported by positive service sector data out of Spain and China, while European Central Bank President Mario Draghi's comments from last week continued to support. 

During European morning trade, the EURO STOXX 50 edged up 0.25%, France’s CAC 40 rose 0.16%, while Germany’s DAX 30 added 0.25%. 

Markit research group said Spain's services purchasing managers' index rose to 48.5 in July from a reading of 47.8 the previous month, beating expectations for a rise to 48.0. 

In China, the HSBC PMI for the services industry for July read 51.3, the same reading as June. Readings above 50 indicate expansion. 

The official government reading for non-manufacturing PMI in July released over the weekend was 54.1 compared with 53.9 in June. 

European equities found support last week, after ECB President Draghi said that the central bank’s monetary policy will remain accommodative “for an extended period of time”. 

Financial stocks were mixed, as French lenders BNP Paribas and Societe Generale added 0.29% and 0.15%, while Germany's Deutsche Bank slipped 0.17%. 

Among peripheral lenders, Spanish bank BBVA edged up 0.14%, while Italy's Unicredit and Intesa Sanpaolo declined 0.76% and 0.70%. 

Elsewhere, Veolia Environnement jumped 1.07% even asn net income fell to EUR3.6 million from EUR162 million a year earlier and operating income dropped to EUR364 million from EUR373 million. 

In London, commodity-heavy FTSE 100 rose 0.52% supported by gains in the mining sector. 

Mining giants Rio Tinto and BHP Billiton both added 0.15%, while rivals Anglo American and Vedanta Resources rallied 1.17% and 1.79% respectively. 

Meanwhile, financial stocks were mixed. Shares in Barclays climbed 0.83% and Lloyds Banking surged 2.71%, while HSBC Holdings dipped 0.05% and the Royal Bank of Scotland retreated 0.64%. 

In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.03% gain, S&P 500 futures signaled a 0.01% rise, while the Nasdaq 100 futures indicated a 0.08% increase. 

Later in the day, the Institute for Supply Management was to release its nonmanufacturing index.

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