European Morning Wrap Up; sterling comes under pressure

• Irish June services PMI 42.3 vs 39.5 in May,  13 month high
• Swiss June CPI +0.2% m/m, -1.0% y/y, very close to median forecasts of  +0.1%, -1.0%
• Ex-PBOC official sees global yuan role after a decade
• Italy June services PMI 42.3 from 43.1 in May, below median forecast of 42.9 and first fall since February
• Euro zone June (final) composite PMI revised up 44.6 from flash 44.4
• UK June services PMI falls to 51.6 from 51.7 in May, pretty much in line with median forecast of 51.5
• Emerging nations may debate dollar’s role as key currency on sidelines of G8 summit, but unlikely to be official debate.  Major countries should support dollar as key international currency -Japanese official
• Euro zone May retail sales -0.4% m/m, -3.3% y/y, weaker than median forecasts of -0.1%, -2.7% respectively
• OPEC President says oil price between $68 and $71 per barrel is appropriate – Xinhua

Most prominent feature of trading this moring has been sterling weakness with cable down at1.6315 from an early 1.6390, while EUR/GBP is up at .8575 from around .8540.

It all started out so well for sterling, with cable ralling nicely, reaching a session high 1.6431 where it ran into well-touted sell orders. It was all down hill from there, with a US investment house known affectionately as Snidely Whiplash & Co by some, seen as an aggressive seller on the way down. 

UK June services PMI came in at 51.6, pretty much in line with the median forecast of 51.5 which didn’t help matters. Sterling needed a decently above forecast number today and didn’t get it.  Infact there seemed to be a fair few people looking for a number around 52.0.

Sell stops just below 1.6320 were triggered in late morning trade leading to a session low 1.6303 being posted.  Technical supports now at 1.6300 and 1.6280, with more sell stops seen in 1.6275/80 area.  Thin Friday markets ahead of a US hliday won’t have helped cable’s cause.

Elsewhere EUR/GBP advanced to .8575 from an early .8540.

EUR/USD rallied early but ran into good sell interest up around 1.4030 and that effectively was that. Quickly returned to 1.4000 area where it’s spent most of the session, presently at 1.3990.  Reports of sovereign interest lying in wait down at 1.3900/30 area will be lending underpinning.

Swissy is marginally weaker, with EUR/CHF up at 1.5225 from an early 1.5190, yesterdays warning from SNB’s Jordan regarding ad-hoc intervention still ringing in people’s ears.

USD/JPY sits at 95.95, effectively unchanged on the day.