Australian Dollar (AUD) Stumbles as PMIs Miss Forecasts
The Australian Dollar (AUD) lost ground against most of its peers at the end of last week, as private sector PMIs missed expectations.
During the Asian session, Judo Bank’s services and manufacturing releases printed at 46.9 and 50.4 respectively. Capping losses were indications that inflation may be beginning to ease; nevertheless, AUD investors lacked confidence amid a risk-off market mood.
A lack of data during today’s session could expose the ‘Aussie’ to losses against its peers, if the market mood remains broadly downbeat.
New Zealand Dollar (NZD) Inches Higher despite Risk Aversion
The New Zealand Dollar (NZD) saw some modest gains against its peers on Friday, in spite of bearish market sentiment and disappointing domestic data.
As this week commences, a reduction in New Zealand’s trade deficit could help to buoy the ‘Kiwi’.
Pound (GBP) Softens as Retail Sales Slide
The Pound weakened as Friday’s European session opened, as UK retail sales printed at –0.4% rather than the 0.3% expected.
However Sterling was able to recoup the bulk of these losses with the release of the UK’s latest PMIs, after the service-sector unexpectedly avoided a contraction this month
December’s industrial trends orders may influence Pound trading today. If the release falls to –12 as forecast, GBP could come under some pressure.
Euro (EUR) Strengthens as PMI Data Impresses
The Euro (EUR) firmed at the end of last week, as PMI data from the bloc printed above expectations.
Manufacturing activity in the Eurozone hit 47.8 as opposed to the 47.1 expected, while the services PMI rose to 49.1 for December. Later in the European session, the Euro area’s trade deficit shrank rather than expanding, further buoying the single currency.
Germany’s Ifo business climate indicator is likely to affect Euro exchange rates today. Another improvement in business sentiment could push the single currency higher.
US Dollar (USD) Muted on Dismal PMIs
The US Dollar (USD) was subdued at the end of last week, as weaker-than-expected PMI data later in Friday’s acted headwinds for the currency.
A risk-off mood and hawkish signals from the Federal Reserve ensured the ‘Greenback’s losses were minimal, however.
A lack of US data today leaves USD to trade on external factors. If markets remain risk averse, the ’Greenback’ could climb.
Canadian Dollar (CAD) Subdued by Falling Oil Prices
The Canadian Dollar (CAD) traded sideways on Friday, as a fall in the price of crude oil capped gains for the currency. The 10-year Canadian government bond yield rose marginally, but this failed to substantially buoy the ‘Loonie’.
Canada’s PPI release is scheduled today and is expected to have climbed on an annualised basis. This would be at odds with consumer price inflation, potentially complicating Bank of Canada (BoC) rate hike bets.
Data Releases
Dec 19th 19:00 EUR German Ifo Business Climate (Dec) 87.4
Dec 19th 21:00 GBP CBI Industrial Trends (Dec) -12
Dec 19th 23:30 CAD PPI (Nov) 11%
Dec 20th 07:45 NZD Balance of Trade (Nov) NZ$-1800m