Foreign exchange market. European session: the British pound rose against the U.S. dollar due to the better-than-expected services PMI

Economic calendar (GMT0):

01:30    Australia             Gross Domestic Product (QoQ)          Quarter I   +0.8%  +0.9%   +1.1%

01:30    Australia             Gross Domestic Product (YoY)           Quarter I   +2.8%                +3.5%

07:48    France                Services PMI (Finally)                         May            49.2      49.2       49.1

07:53    Germany            Services PMI (Finally)                         May            56.4      56.4       56.0

07:58    Eurozone            Services PMI                                      May            53.5      53.5       53.2

08:30    United Kingdom  Purchasing Manager Index Services   May           58.7      58.3       58.6

09:00    Eurozone            Producer Price Index, MoM                April           -0.2%   -0.1%    -0.1%

09:00    Eurozone            Producer Price Index (YoY)                May          -1.6%   -1.2%    -1.2%

09:00    Eurozone            GDP (QoQ) (Revised)                        Quarter I  +0.2%  +0.2%   +0.2%

09:00    Eurozone            GDP (YoY) (Revised)                         Quarter I  +0.9%  +0.9%   +0.9%

The U.S. dollar traded lower against the most major currencies ahead of the release of several U.S. economic reports.

The euro increased against the U.S. dollar despite the weaker-than-expected economic data in the Eurozone. Eurozone’s services purchase managers’ index (PMI) declined to 53.2 in May from 53.5 in April. Analysts had expected that the index remains unchanged.

Eurozone’s gross domestic product remained unchanged at 0.2% in the first quarter, meeting analysts’ expectation.

Eurozone’s producer price index fell 0.1% in April, after a 0.2% decline in March. This figure was expected by analysts.

German final services PMI declined to 56.0 in May from 56.4 in April. Analysts had expected that the index remains unchanged.

French final services PMI sank to 49.1 in May from 49.2 in April. Analysts had expected that the index remains unchanged.

Market participants expect the European Central Bank will add further stimulus measures on Thursday. Investors are awaiting the ECB will cut interest rates and announce measures to boost lending to smaller businesses.

The British pound rose against the U.S. dollar due to the better-than-expected services PMI. The U.K. services purchasing managers' index declined to 58.6 in May, from 58.7 in April, but exceeding analysts’ expectations for a decline to 58.3.

The Canadian dollar traded higher against the U.S. dollar ahead of the Canadian trade balance data and the Bank of Canada’s interest rate decision. The Canadian trade balance deficit should be 0.2 billion CAD, after a surplus of 0.1 billion CAD.

Interest rate in Canada should remain unchanged at 1.00%.

EUR/USD: the currency pair increased to $1.3626

GBP/USD: the currency pair climbed to $1.6766

USD/JPY: the currency pair decreased to Y102.56

The most important news that are expected (GMT0):

12:00    G7                 G7 Meetings                                                 

12:15    U.S.               ADP Employment Report                May          220        217       

12:30    Canada         Trade balance, billions                    April            0.1      -0.2      

12:30    U.S.              International Trade, bln                    April         -40.4     -40.8    

12:30    U.S.              Nonfarm Productivity, q/q (Finally)  Quarter I  -1.7%   -2.2%  

14:00    Canada         Bank of Canada Rate                                      1.00%   1.00%  

14:00    Canada         BOC Rate Statement                                                 

14:00    U.S.              ISM Non-Manufacturing                    May          55.2      55.6     

18:00    U.S.              Fed's Beige Book