Australian Dollar (AUD) Climbs as Chinese Economy Shows Signs of Recovery
The Australian Dollar (AUD) firmed on Wednesday. Signs of a recovery in China’s manufacturing PMI bolstered AUD, due to the currency’s status as a proxy for the Chinese economy.
Bets on further interest rate hikes from the Reserve Bank of Australia (RBA) also lent support to the Australian Dollar.
A lack of data for the ‘Aussie’ today will likely leave the currency subject to any changes in risk appetite.
New Zealand Dollar (NZD) Slips as Employment Figures Disappoint
The New Zealand Dollar (NZD) trended lower on Wednesday after weaker-than-expected employment data.
The subsequent pullback in Reserve Bank of New Zealand (RBNZ) interest rate hike bets weighed on NZD.
The ‘Kiwi’ has no major data releases today. Therefore, NZD is likely to be affected by any changes in the market mood.
Pound (GBP) Drops amid Manufacturing Sector Contraction
The Pound (GBP) slipped during yesterday’s session. January’s PMI figures pointed to a contraction in the country’s manufacturing sector, which weighed on Sterling.
Bets on the Pound were also subdued ahead of the Bank of England’s (BoE) interest rate decision.
The BoE’s forecast 50bps interest rate hike could prompt a modest uptick in GBP tonight. On the other hand, predicted signals of a slowdown in future rate hikes could weigh on Sterling.
Euro (EUR) Rises as Unemployment Remains at Record Low
The Euro (EUR) climbed on Wednesday. November’s unemployment rate bolstered EUR as it remained close to record lows.
On the other hand, a larger-than-forecast cooldown in Eurozone inflation capped gains for the single currency.
Investors will be keenly awaiting the European Central Bank’s (ECB) interest rate decision later tonight. The forecast 50bps hike and expected hawkish forward guidance could boost EUR.
US Dollar (USD) Tumbles amid Signs of Cooling Labour Market
The US Dollar (USD) slumped overnight following the latest employment data. January’s ADP employment figures fell to their lowest point since January 2021.
USD saw further losses after the release of January’s manufacturing PMI. Output in the sector fell for a fifth consecutive month, declining more than expected.
Looking to today, USD may see movement as markets respond to the Federal Reserve’s interest rate decision. The latest jobless figures could see USD tick higher if they remain close to previous lows.
Canadian Dollar (CAD) Slips amid USD Weakness
The Canadian Dollar (CAD) was pulled lower on Wednesday by a weaker US Dollar. The commodity-linked ‘Loonie’ was underpinned by firming oil prices, however.
With no data releases today, movement in CAD will likely be driven by any shifts in the price of oil.
Data Releases
Feb 2nd 17:00 EUR German Balance of Trade (Dec) €5.1bn
Feb 2nd 22:00 GBP BoE Interest Rate Decision 4%
Feb 2nd 23:15 EUR ECB Interest Rate Decision 3%
Feb 2nd 23:30 USD Initial Jobless Claims (Jan/28) 200,000
Feb 2nd 23:45 EUR ECB Press Conference
Feb 2nd 01:15 EUR ECB President Lagarde Speech