Pound May Overlook PMIs as BOE Looms, US Dollar May Rise on Data

Talking Points:

• British Pound to Overlook Services PMI as BOE Rate Decision Looms Ahead
• US Dollar May Rise as ISM, ADP Reports Boost Bets on September Fed Hike
• See Economic Releases Directly on Your Charts with the DailyFX News App

July’s UK Services PMI data headlines the economic calendar in European hours. Expectations call for the index to edge narrowly lower to 58.0 from 58.5 recorded in the prior month, reflecting a slight deceleration in the pace of sector activity growth. The outcome may not inspire follow-through from the British Poundhowever as traders withhold directional conviction until after this week’s much-anticipated Bank of England policy announcement passes.

Later in the day, the spotlight shifts to US economic data. The ISM Non-Manufacturing Composite gauge is expected to print at 56.2 in July, a hair higher than June’s 56.0 result. Meanwhile, the ADP Employmentgauge of private-sector hiring is forecast to reveal a slowdown in job creation, with payrolls rising by 215,000 in July compared with a 237,000 increase in the prior month. US economic data has increasingly outperformed relative to analysts’ bets since mid-May, opening the door for upside surprises. Such outcomes may help boost the perceived probability of a September Fed rate hike in, pushing the US Dollar higher.

The Australian Dollar underperformed in otherwise quiet Asian trade as prices corrected following yesterday’s outsized rally in the wake of the RBA monetary policy announcement. Falling equity prices may have compounded downside pressure. Australia’s benchmark S&P/ASX 200 stock index declined as much as 1 percent, pointing to souring risk appetite that could have further hurt the sentiment-linked currency.

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Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
22:45	NZD	Unemployment Rate (2Q)	5.9%	5.9%	5.8%
22:45	NZD	Participation Rate (2Q)	69.3%	69.6%	69.5%
22:45	NZD	Employment Change (QoQ) (2Q)	0.3%	0.5%	0.6%
22:45	NZD	Employment Change (YoY) (2Q)	3.0%	3.4%	3.2%
22:45	NZD	Pvt Wages Inc Overtime (QoQ) (2Q)	0.5%	0.5%	0.3%
22:45	NZD	Pvt Wages Ex Overtime (QoQ) (2Q)	0.5%	0.5%	0.3%
22:45	NZD	Average Hourly Earnings (QoQ) (2Q)	1.2%	0.5%	0.2%
23:01	GBP	BRC Shop Price Index (YoY) (JUL)	-1.4%	-	-1.3%
23:30	AUD	AiG Perf of Services Index (JUL)	54.1	-	51.2
01:35	JPY	Nikkei Japan PMI Services (JUL)	51.2	-	51.8
01:35	JPY	Nikkei Japan PMI Composite (JUL)	51.5	-	51.5
01:45	CNY	Caixin China PMI Composite (JUL)	50.2	-	50.6
01:45	CNY	Caixin China PMI Services (JUL)	53.8	-	51.8

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
07:15	CHF	CPI (MoM) (JUL)	-0.4%	0.1%	Medium
07:15	CHF	CPI (YoY) (JUL)	-1.0%	-1.0%	Medium
07:15	CHF	CPI - EU Harmonized (MoM) (JUL)	-	0.2%	Medium
07:15	CHF	CPI - EU Harmonized (YoY) (JUL)	-	-0.6%	Medium
07:45	EUR	Markit/ADACI Italy Services PMI (JUL)	53.0	53.4	Low
07:45	EUR	Markit/ADACI Italy Composite PMI (JUL)	53.8	54	Low
07:50	EUR	Markit France Services PMI (JUL F)	52.0	52.0	Low
07:50	EUR	Markit France Composite PMI (JUL F)	51.5	51.5	Low
07:55	EUR	Markit Germany Services PMI (JUL F)	53.7	53.7	Medium
07:55	EUR	Markit/BME Germany Composite PMI (JUL F)	53.4	53.4	Medium
08:00	EUR	Markit Eurozone Services PMI (JUL F)	53.8	53.8	Medium
08:00	EUR	Markit Eurozone Composite PMI (JUL F)	53.7	53.7	Medium
08:30	GBP	Official Reserves Changes (JUL)	-	$1M	Low
08:30	GBP	Markit/CIPS UK Services PMI (JUL)	58.0	58.5	High
08:30	GBP	Markit/CIPS UK Composite PMI (JUL)	56.9	57.4	High
09:00	EUR	Eurozone Retail Sales (MoM) (JUN)	-0.2%	0.2%	Medium
09:00	EUR	Eurozone Retail Sales (YoY) (JUN)	2.0%	2.4%	Medium

Critical Levels

CCY	Supp 3	Supp 2	Supp 1	Pivot Point	Res 1	Res 2	Res 3
EURUSD	1.0698	1.0807	1.0844	1.0916	1.0953	1.1025	1.1134
GBPUSD	1.5433	1.5509	1.5536	1.5585	1.5612	1.5661	1.5737