The dollar cut gains against its peers today after having strengthened to 1 month highs as US service sector data revealed a decline in output for June, even though the greenback had been underpinned by the result of Greece’s referendum on Sunday. The US non-manufacturing purchasing managers’ index reflected growth at a slower than forecast rate as the index ticked up from a reading of 55.7 in May to 56.0 in June while shy of expectations of 56.2. The US dollar index reached 1 month highs of 96.84 earlier in the session to come off holding steadily at 96.34.
The euro weakened against the dollar with the pair down 0.4% trading at 1.1066 after a vast majority of voters in Greece refused to accept bailout terms required by the country’s creditors. This heightened impasse has intensified concerns regarding Greece’s status within the euro zone and if it will remain a member. Greek Prime Minister Tsipras had called for a no vote and was happy with the referendum result indicating that his government would be better positioned to request a 3rd bailout program. Tsipras is resuming talks to reopen banks after having been closed for more than a week. Greece’s banks could be depleted of cash in a matter of days with no emergency funds coming from the European Central Bank. German factory orders declined 0.2% in May while experts forecast a 0.4% decline following a 2.2% rise in April.
The pound strengthened against the dollar with the pair reaching a session high 1.5628 after trading steadily around 1.5570 for most of the session off its low of 1.5529 hit earlier in the day. The UK is set to release manufacturing production data tomorrow where better than expected figures will boost the pound even further.
The yen held its ground against the dollar as the yen gained support from safe haven demand on the back of Greece’s referendum. The pair hit a session low of 121.85 early in the day which was the pair’s lowest level since June 30. The pair has since come off its session high of 122.92 and is trading at 122.47.
The Australian dollar held its ground against the greenback with the pair trading steadily at 6 year lows of 0.7517. The New Zealand dollar strengthened against the greenback with the pair up 0.24% trading at 0.6706 coming off its 5 year low of 0.6652 reached earlier in the session. The Canadian dollar weakened against the greenback with the pair gaining 0.44% trading at new 2.5 month highs of 1.2629. Market sentiment and its appetite for riskier assets were broadly diminished in the aftermath of Greece’s referendum.
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