Australian Dollar (AUD) rises as business pessimism fades
Yesterday saw the Australian Dollar (AUD) strengthen against most major peers, following better-than-expected business confidence data.
Pessimism decreased among Australian businesses, owing to robust retail and mining data. This, in conjunction with upbeat trade, yielded tailwinds for the ‘Aussie’ as investors cheered signs of improving conditions.
AUD could trade in wide range today, as markets digest the morning’s PMI releases.
New Zealand Dollar (NZD) strengthens despite contracting service sector
The New Zealand Dollar (NZD) shrugged off a dismal services PSI yesterday, as upbeat trade lifted the currency against its safer peers.
While the index showed that the key sector slipped into contraction in December, the risk-sensitive ‘Kiwi’ benefitted from risk-on trade. Additionally, NZD’s close links to AUD may have further lifted the currency.
This morning, NZD may see volatile trade as investors react to the latest New Zealand inflation data.
Pound (GBP) slips despite lower government borrowing
During Tuesday’s session, the Pound (GBP) weakened against its peers despite better-than-expected UK government borrowing figures.
However, the figures prompted speculation that UK Chancellor Jeremy Hunt could have room for additional spring tax cuts, which cushioned GBP.
The UK’s latest preliminary PMIs are due to print this evening. If the UK service sector slowed in January, as forecast, GBP could weaken.
Euro (EUR) slips as consumer confidence deteriorates
Tuesday saw the Euro (EUR) begin quietly as markets looked ahead to the latest Eurozone consumer confidence data.
Following its publication, the common currency began to slip as the reading missed forecasts. In January, consumers in the bloc became more pessimistic, which weighed on sentiment towards the Euro.
This evening, the latest Eurozone private sector indexes are scheduled for release. Activity is expected to have improved in January but remained in negative territory, which may undermine EUR.
US Dollar (USD) flat amid lack of data
With data releases few and far between, the US Dollar (USD) traded listlessly against its rivals on Tuesday.
Furthermore, a cautiously cheery market mood further limited the safe-haven ‘Greenback’ during the session.
Later tonight, the latest US services PMI is due to print. Softening activity in the key sector could weigh on USD.
Canadian Dollar (CAD) quiet ahead of BoC decision
The Canadian Dollar (CAD) endured muted trade yesterday as investors began to shift attention to the Bank of Canada’s (BoC) looming interest rate decision.
Overnight, the BoC is expected to keep interest rates unchanged. However, any indications of imminent rate cuts could weaken the ‘Loonie’ against its peers.
Data Releases
Jan 24th 19:00 EUR Services PMI (Jan) 49
Jan 24th 19:30 GBP Services PMI (Jan) 53.2
Jan 25th 00:45 USD Services PMI (Jan) 51
Jan 25th 01:00 CAD BoC Interest Rate Decision 5%