Australian Dollar (AUD) Falls amid Poor Chinese Data
The Australian Dollar (AUD) initially strengthened on Monday thanks to a return of global risk appetite.
However, poor data then pushed the ‘Aussie’ lower. In particular, the latest PMIs confirming a contraction in China’s services sector dented AUD.
The Reserve Bank of Australia’s (RBA) interest rate decision is in focus today. Could another dovish hike hurt the ‘Aussie’ Dollar?
New Zealand Dollar (NZD) Drops despite Risk-On Sentiment
The New Zealand Dollar (NZD) dropped on Monday despite an initial risk-on mood.
The ‘Kiwi’ was pulled lower by its positive correlation to the Australian Dollar and poor Chinese PMI figures.
Amid a lack of notable New Zealand data today, risk appetite and AUD movements could continue driving NZD.
Pound (GBP) Slides as Service Sector Contraction Adds to Poor UK Outlook
The Pound (GBP) slipped yesterday as downbeat data releases added to the UK’s poor long-term outlook. The final reading of November’s services PMI confirmed a contraction in the sector.
The latest predictions from the Confederation of Business Industry (CBI) also added to Sterling’s woes. The CBI’s latest forecasts pointed to a 0.4% contraction in the UK economy.
The latest British retail sales figures for November could push Sterling lower today if sales slow as forecast.
Euro (EUR) Rises after Hawkish ECB Comments
The Euro (EUR) climbed yesterday after hawkish comments from European Central Bank (ECB) policymaker Gabriel Makhlouf, who said that a 50bps rate rise in two weeks’ time is the minimum to expect.
On the other hand, data releases pointing to a recession in the Eurozone kept EUR’s gains limited. October’s retail sales fell alongside a contraction in the bloc’s services sector.
Later today, German factory orders could impact the common currency. Will a modest recovery be enough to boost EUR?
US Dollar (USD) Boosted by Above-Forecast PMI Figures
The US Dollar (USD) regained some lost ground yesterday. An uptick in US Treasury bond yields lent support to the currency.
An above-forecast expansion in service sector performance also helped USD to climb. Additionally, a strong increase in factory orders also bolstered the US Dollar.
Looking ahead, risk appetite could determine USD movement today. If the market mood sours, the safe-haven ‘Greenback’ could climb.
Canadian Dollar (CAD) Climbs as Oil Prices Rise
The Canadian Dollar (CAD) was bolstered by a rise in crude oil prices on Monday. Oil prices were boosted by the introduction of a price cap on Russian oil and OPEC’s decision to stick to supply cuts.
Looking ahead, a forecast widening of Canada’s trade surplus could push CAD higher. On the other hand, a slip in private sector output could weigh on the currency.
Data releases
Dec 6th 10:01 GBP BRC Retail Sales Monitor (Nov) 0.6%
Dec 6th 13:30 AUD RBA Interest Rate Decision 3.1%
Dec 6th 23:30 CAD Balance of Trade (Oct) C$1.2bn
Dec 7th 01:00 CAD Ivey PMI (Nov) 49