Australian Dollar Rocked by Conflicting Trade Headlines
The Australian Dollar (AUD) traded in a wide range on Friday as markets wrestled with conflicting headlines regarding a possible US-China trade deal. This came as President Trump refuted a story from the Wall Street Journal suggesting the US has agreed to a deal which would see tariffs on Chinese products begin to be rolled back, before later taking to Twitter to announce this was in fact happening.
Looking ahead, the publication of the minutes from the Reserve Bank of Australia’s (RBA) December policy meeting will be eyed by AUD investors at the start of the week as markets look for any additional signs the bank will continue to ease monetary policy in 2020.
Pound Fails to Stabilise at Post-Election Highs
The Pound (GBP) fell victim to its own success at the end of last week’s session, with GBP investors seeking to book profits after a dramatic surge in Sterling overnight on Thursday. This jump in the Pound was, of course, bought on by the Conservative’s impressive victory in the General election. The result was cheered by GBP investors as they hope it will bring some clarity to Brexit.
All eyes will now be on Boris Johnson as the PM is expected to table his Brexit deal for a vote in the coming days as he attempts to ratify it before Christmas. On top of that we have the publication of the UK’s latest PMI figures, with another gloomy reading potentially weighing on Sterling sentiment.
Euro Muted on Growth Fears
The Euro (EUR) was mostly rangebound on Friday, with concerns over slowing growth in the Eurozone limiting the appeal of the single currency. Markets are mostly concerned by Italy and Germany as analysts warn both remain at risk of a recession next year.
In the spotlight for EUR investors this week will be the publication of the Eurozone’s PMI figures later today. Will an improvement in private sector growth lend the Euro some support?
US Dollar Buoyed by Phase One Trade Deal News
The US Dollar (USD) soared at the end of last week as it was announced that the US and China had reached a phase one trade deal. The news was cheered by USD investors, who hope it will help to reverse a slowdown in domestic growth and weaken the case for the Federal Reserve to continue easing monetary policy in 2020.
On the docket for USD investors at the start of the week will be the publication of the Empire state manufacturing index, with a modest rise in factory activity potentially buoying the US Dollar in overnight trade.
Canadian Dollar Buoyed by Bullish Oil Prices
The Canadian Dollar (CAD) accelerated on Friday, with the ‘Loonie’ being underpinned by robust oil prices as Brent crude climbed to over $65 a barrel.
New Zealand Dollar Fluctuates amid Mixed Risk Appetite
The New Zealand Dollar (NZD) was infused with fresh volatility at the end of last week’s session as market risk appetite was rocked by a mixed outlook for US-China trade.
Data Releases
December 16th 08:00 AUD Manufacturing PMI (Dec) 50.1
December 16th 08:00 AUD Services PMI (Dec) 49.9
December 16th 19:00 EUR Manufacturing PMI (Dec) 47.1
December 16th 19:00 EUR Services PMI (Dec) 52
December 16th 19:30 GBP Manufacturing PMI (Dec) 49.4
December 16th 19:30 GBP Services PMI (Dec) 49.6
December 16th 20:00 EUR Wage Growth (Q3) 2.6%
December 16th 23:30 USD Empire State Manufacturing Index (Dec) 3.5