Australian Dollar (AUD) Slides as China-US Tensions Grow
The Australian Dollar (AUD) slipped on Thursday amid a downturn in coal and iron ore prices. Escalating tensions between China and the US also weighed on the ‘Aussie’.
On the other hand, reports indicating a 90% drop in China’s Covid case numbers underpinned AUD.
Looking to today, the final reading of January’s services sector PMI could weigh on AUD if it confirms a contraction.
New Zealand Dollar (NZD) Boosted by Upbeat Market Mood
The risk-sensitive New Zealand Dollar (NZD) was bolstered by a positive market mood yesterday.
The ‘Kiwi’ also found support from a fall in the US Dollar (USD), due to the currencies’ negative correlation.
With no data releases today, movement in NZD is likely to be driven by any shifts in risk appetite.
Pound (GBP) Slips as BoE Turns Dovish Following 50bps Rate Hike
The Pound (GBP) dropped on Thursday. The Bank of England’s (BoE) 50bps rate hike provided little support to the currency.
The BoE’s dovish forward outlook pulled GBP lower following the meeting, while downbeat economic forecasts also pressured the Pound.
Looking to today, the final reading of January’s service sector PMI could push GBP lower if it confirms a deeper contraction.
Euro (EUR) Drops amid Profit-Taking after ECB Rate Decision
The Euro (EUR) slipped on Thursday. EUR suffered from profit-taking following the European Central Bank’s (ECB) decision to hike interest rates by 50bps.
Uncertainty surrounding the ECB’s forward path deepened losses for EUR. ECB President Christine Lagarde refused to commit to any further 50bps rate hikes beyond March.
The final reading of January’s Eurozone services PMI could lend support to EUR today if it confirms an expansion.
US Dollar (USD) Attracts Dip-Buying after Fed Slump
The US Dollar initially slumped on Thursday after the Federal Reserve signalled a policy slowdown with a smaller 25bps rate hike.
USD managed to regain some lost ground amid persistent dip-buying. An unexpected fall in jobless claims figures also bolstered the US Dollar amid signs of a persistently tight labour market.
The latest employment data could push USD lower today if it prints as forecast. The unemployment rate is forecast to tick higher, whilst employment growth is expected to ease.
Canadian Dollar (CAD) Climbs amid Steady Oil Prices
The Canadian Dollar (CAD) benefitted from some dip-buying on Thursday. Steadier oil prices also lent support to the crude-linked ‘Loonie’.
With no data releases today, CAD will likely be affected by any shifts in the price of oil.
Data Releases
Feb 3rd 08:00 AUD Judo Bank Services PMI Final (Jan) 48.3
Feb 3rd 19:00 EUR S&P Global Services PMI Final (Jan) 50.7
Feb 3rd 19:30 GBP S&P Global/CIPS Services PMI Final (Jan) 48
Feb 3rd 23:30 USD Unemployment Rate (Jan) 3.6%
Feb 3rd 23:30 USD Non Farm Payrolls (Jan) 185,000
Feb 4th 01:00 USD ISM Non-Manufacturing PMI (Jan) 50.4