Some respite for the dollar

There has been some respite for the dollar over the past couple of trading sessions. Having fallen to over $1.19 against the euro early on Friday, the US currency has since regained ground to trade sub $1.18 this morning, while similarly against sterling it has strengthened to under $1.31 from a low of almost $1.32 on Friday. Of course, whether this proves to be just some short-term relief for the dollar remains to be seen. Meanwhile, sterling is a little firmer against the euro this morning at around 90p

Equity markets kicked off the week on a reasonably positive note with European stocks closing more than 2% higher yesterday, while US 10-year bond yields nudged up to around 0.55% with equivalent German yields largely unchanged at -0.51%

The ISM index of manufacturing activity in the US rose for a third consecutive month in July and at 54.2 is signalling renewed expansion in the sector after a sharp fall in output in the second quarter

The final manufacturing PMI readings in the Euro area and UK both came in above 50 in July, again pointing to a return to growth in this sector of the two economies

The Bank of England meets this week and is likely to keep the stance of monetary policy unchanged, while on the data front the most notable release is the employment report in the US scheduled for Friday