Australian Dollar (AUD) Falls on Weak Chinese Data, Commodity Dynamics
The Australian Dollar (AUD) slumped on Friday as Chinese data revealed a slowdown in service-sector activity for the month of November.
Also adding to AUD downside, iron ore exports have recently fallen, dropping by 40% from a $19 billion peak in July to $11.4 billion in October.
Looking ahead, the ‘Aussie’ may benefit tomorrow if the Ai Group services index increases to 53 as forecast.
Pound (GBP) Dented by Weak Services Data, Dovish BoE Commentary
The Pound (GBP) slid down against the majority of its peers at the end of last week, as weak PMI data suppressed trading sentiment. The UK’s finalised services PMI printed lower than expected, at 58.5 as opposed to 58.6.
Dovish comments from the Bank of England (BoE)’s Michael Saunders also weighed up Sterling: Saunders said that he would be considering the effects of the Omicron Covid variant at December’s MPC meeting.
Today’s construction PMI is likely to exert further pressure upon the Pound, if a slowdown in activity is confirmed as predicted.
Euro (EUR) Firms as Lagarde Gives Hawkish Speech
The Euro (EUR) benefitted on Friday from hawkish signalling from the European Central Bank (ECB).
President Christine Lagarde remarked that ‘when conditions of the forward guidance are satisfied, we will not hesitate to act’, while also confirming that the ECB’s PEPP will end in March 2022. Elsewhere, retail sales met targets, lending further support to the single currency.
German factory orders could influence trading later today, weighing upon the Euro if they fall as expected, but losses may be capped if German and Eurozone construction PMIs rise.
US Dollar (USD) Strengthens despite Mixed Data
The US Dollar (USD) was largely supported at the end of last week, despite mixed data releases. Non-farm payrolls revealed that the US economy added just 210,000 jobs in November, well below market expectations of 550,000.
Contrarily, the unemployment rate fell by more than expected – to 4.2% rather than 4.5%. The ISM non-manufacturing PMI also increased, rather than decreasing as forecast, and factory orders grew by more than predicted.
A lack of significant data today leaves USD to trade on external factors and risk sentiment – any indications of Federal Reserve policy stance may also direct ‘Greenback’ movement.
Canadian Dollar (CAD) Strengthens on Oil Prices and Upbeat Data
The Canadian Dollar (CAD) trended up on Friday as both higher oil prices and positive Canadian data lent tailwinds to the currency. Canada’s unemployment rate fell further than the 6.6% expected to 6%, and new hires in November rose to 153.7K, well above predictions.
New Zealand Dollar (NZD) Muted on Lack of Data
The New Zealand Dollar (NZD) dipped at the end of last week as a lack of data exposed the currency to losses. NZD was also negatively affected by poor Chinese data, as China is the country’s second-biggest trading partner.
Data Releases
Dec 6th 17:00 EUR German Factory Orders (Oct) -0.5%
Dec 6th 18:30 EUR Eurozone Construction PMI (Nov) 51.5
Dec 6th 18:30 EUR German Construction PMI (Nov) 48.5
Dec 6th 19:30 GBP Construction PMI (Nov) 54.2
Dec 6th 21:30 GBP BoE Broadbent Speech N/A
Dec 7th 07:30 AUD Ai Group Services Index (Nov) 53