Australian Dollar (AUD) Slides on Weak Chinese Data
The Australian Dollar (AUD) slumped on Tuesday, undermined by the publication of some lacklustre Chinese data.
The Caixin manufacturing PMI reported China’s factory sector suffered its fifth consecutive monthly decline in December. Stoking concerns over demand for key Australian exports such as iron ore.
In the absence of any notable AUD data, movement in the ‘Aussie’ is likely to be tied to market risk appetite. Could a cautious mood leave it vulnerable to further losses?
New Zealand Dollar (NZD) Slumps amid USD Strength
The New Zealand Dollar (NZD) also stumbled through yesterday’s session. The ‘Kiwi’ struggled to hold its ground amid notable US Dollar strength as well as the downbeat Chinese manufacturing data.
With domestic data in short supply its likely movement in the ‘Kiwi’ will also be linked to market risk appetite today.
Pound (GBP) Bolstered by Upbeat PMI
The Pound (GBP) firmed on Tuesday, following the publication of the UK’s latest manufacturing PMI.
December’s finalised index was revised up from 44.7 to 45.3. The more modest-than-expected slump in the UK’s factory sector helping to boost hopes for a shallow UK recession.
Coming up later this evening is the release of the UK’s latest consumer credit figures. Will another rise in credit raise concerns over household debt amid the cost of living crisis?
Euro (EUR) Buoyed by Slump in German Inflation
The Euro (EUR) got off to a poor start yesterday due to the single currency’s negative correlation with the US Dollar.
However, the Euro was able to recoup a portion of these losses overnight following the publication of Germany’s consumer price index. December’s preliminary figures reported German inflation cooled more than expected.
The publication of the Eurozone’s latest services PMI will be in focus for EUR investors today. Could an above forecast reading help to extend the Euro’s recovery later this evening?
US Dollar (USD) Soars as Markets Reopen
The US Dollar (USD) rocketed higher as markets reopened following the New Year, with USD exchange rates appreciating 1% or more at the start of the European session, amid a technical correction.
However, the ‘Greenback’ shed some of these gains in overnight trade as December’s finalised S&P PMI confirmed growth in the US manufacturing sector plunged to its worst levels since May 2020.
Turning to today the spotlight will be on the minutes from the Federal Reserve’s December meeting. USD investors will be keen to see if there is any divergence between doves and hawks regarding the Fed’s terminal rate.
Canadian Dollar (CAD) Dented by Falling Oil Prices
The Canadian Dollar (CAD) trended lower on Tuesday. A weaker-than-expected domestic manufacturing PMI and sharp downturn in oil prices undermined the appeal of the ‘Loonie’.
Sparse domestic data will likely see movement in CAD exchange rates remain sensitive to oil price dynamics today.
Data Releases
Jan 3rd 19:00 EUR Services PMI (Dec) 49.1
Jan 3rd 19:30 GBP Consumer Credit (Nov) £0.9bn
Jan 4th 01:00 USD ISM Manufacturing PMI (Dec) 48.5
Jan 4th 01:00 USD JOLTs Job Openings (Nov) 10m
Jan 4th 05:00 USD FOMC Minutes