Australian Dollar (AUD) Falls as December’s Retail Sales Slump
The Australian Dollar (AUD) was pulled lower by poor retail sales figures yesterday. December sales fell well more than forecast, contracting by 3.9%.
On the other hand, stronger-than-expected Chinese PMI surveys lent support to the ‘Aussie’, due to AUD’s status as a proxy currency for the Chinese economy.
Looking to today, the final reading of January’s manufacturing sector PMI could weigh on AUD if it confirms a contraction.
New Zealand Dollar (NZD) Edges Lower amid Risk-Off Mood
The New Zealand Dollar (NZD) trended lower on Tuesday as the ‘Kiwi’ came under pressure from a risk-off mood, as well as its correlation to the Australian Dollar.
Political jitters may have added to NZD’s woes, with New Zealand’s new Prime Minister Chris Hipkins reshuffling his cabinet.
NZD could find support from the fourth-quarter unemployment rate today if it remains close to record lows.
Pound (GBP) Drops as IMF Downgrades Forecasts for UK Economy
The Pound (GBP) slipped on Tuesday after poor growth forecasts from the International Monetary Fund (IMF). The IMF now expects a 0.6% contraction in UK GDP this year.
Sterling saw its losses limited by bets on a 50bps interest rate hike from the Bank of England (BoE), however.
The Pound could slip today if the final reading of January’s manufacturing PMI confirms a contraction in the sector.
Euro (EUR) Climbs as Eurozone Economy Unexpectedly Expands
The Euro (EUR) firmed against its peers on Tuesday. EUR was pushed higher by a surprise uptick in fourth-quarter Eurozone GDP.
On the other hand, a sharp slump in Germany’s December retail sales capped EUR’s gains yesterday.
If December’s Eurozone unemployment remains close to record lows, it could boost the Euro today. A forecast drop in January’s inflation could dent confidence in EUR, however.
US Dollar (USD) Bolstered by Cautious Market Mood
The US Dollar (USD) rose on Tuesday. The safe-haven ‘Greenback’ benefitted from a risk-off market mood.
USD saw its gains capped by expectations of a slowdown in policy tightening from the Federal Reserve, however. Markets have continued to price in a 25bps rate hike from the Fed.
The latest job openings figures could boost USD today if they print as forecast. December’s openings are expected to edge lower but remain elevated, pointing to a still-tight labour market.
Canadian Dollar (CAD) Boosted by Upbeat GDP Figures
The Canadian Dollar (CAD) was bolstered yesterday by GDP figures confirming a 0.1% expansion in November, meaning Canada’s economy likely grew by 0.4% in Q4. Gains for the crude-linked ‘Loonie’ were capped by a downturn in oil prices, however.
Looking ahead, a forecast contraction in the country’s manufacturing sector could weigh on CAD today.
Data Releases
Feb 1st 07:45 NZD Unemployment Rate (Q4) 3.3%
Feb 1st 08:00 AUD Judo Bank Manufacturing PMI (Jan) 49.8
Feb 1st 19:30 GBP S&P Global/CIPS Manufacturing PMI (Jan) 46.7
Feb 1st 20:00 EUR Unemployment Rate (Dec) 6.5%
Feb 1st 20:00 EUR Inflation Rate (Jan) 9%
Feb 2nd 01:00 USD ISM Manufacturing PMI (Jan) 48
Feb 2nd 01:00 USD JOLTs Job Openings (Dec) 10.23m