Australian Dollar Stable as Trade Talks Begin
The Australian Dollar was largely range bound at the start of this week’s session amid the resumption of trade discussions between the US and China. These are the first formal talks since the two sides agreed to a 90-day tariff truce last year and hopes will be high that progress will be made in resolving the trade dispute.
However, the focus for AUD investors today will likely be on domestic data, with Australia’s latest trade figures potentially lifting the ‘Aussie’ if they beat expectations.
Pound Steady as May Announces Date of Brexit Vote
The Pound also traded in a narrow range on Monday as UK PM Theresa May confirmed a parliamentary vote on her Brexit deal would take place on the 15 January, while also telling the media that the she was still working on securing further assurances from the EU on the Irish backstop.
May will met with up to 200 MPs on Tuesday to discuss their concerns regarding a no-deal Brexit, with Sterling possibly rising if the PM meets their demands to rule out such an outcome.
Strong Eurozone Retail Sales Bolster the Euro
The Euro proved to be one of Monday’s strongest performers as the single currency was bolstered by the publication of the Eurozone’s latest retail sales figures. An upwards revision to the previous reading saw sales growth hold steady at 0.6% in November, easily beating forecasts of 0.2% and providing a small glimmer of hope in the recent run of gloomy data from the Eurozone.
However Tuesday could see the euro fall back should Eurozone business confidence have retreated in December as forecast.
US Dollar Slumps as ISM Non-Manufacturing Sector Underperforms
The US Dollar fell back in overnight trade on Monday as markets reacted to the latest ISM non-manufacturing PMI. The data revealed growth in the US service sector eased to a a five-month low last month, with the slowdown bolstering fears that the US economy may have peaked.
Wednesday morning’s US job figures may help to ease these concerns however, should the JOLTs job figures continue to paint a strong picture of the US labour market.
Canadian Dollar Stable as Ivey PMI Impresses
In contrast to the US PMI data, Canada’s latest business PMI beat expectations last month, with a surprise rise in growth lending support to CAD exchange rates.
The Canadian Dollar also looks poised to weaken overnight on Tuesday, with Canada’s trade deficit forecast to have expanded in November.
New Zealand Dollar Continues to Rally Following Flash Crash
The New Zealand Dollar sought to appreciate at the start of this week’s session, as the currency continued to rally after last week’s flash crash, thanks to broad gains in the commodity market.
It’s unclear whether the ‘Kiwi’ will be able to sustain these gains through the remainder of the week however as a lull in domestic data may limit the currency’s momentum.
January 8th 11:30 AUD Trade Balance (Nov) AU$2.2bn
January 8th 18:00 EUR German Industrial Production (Nov) 0.3%
January 8th 19:30 GBP Halifax House Price Index (Dec) 0.2%
January 8th 21:00 EUR Business Confidence (Dec) 0.99
January 8th 00:30 CAD Trade Balance (Nov) CA$-1.95bn
January 4th 02:00 USD JOLTs Job Openings (Nov) 7.063m