Australian dollar (AUD) muted amid lacklustre PMI results
The Australian dollar (AUD) traded mostly sideways yesterday as a shifting market mood left the risk-sensitive ‘Aussie’ on uncertain ground.
AUD exchange rates also seemed largely unfazed by weaker-than-forecast Australian PMI surveys for December.
Turning to today, Australian economic data is in short supply. As a result, market risk dynamics could drive AUD.
New Zealand dollar (NZD) buoyed by services PMI
The New Zealand dollar (NZD) firmed during yesterday’s session, with a stronger-than-forecast domestic services PMI boosting the ‘kiwi’.
With no New Zealand data due out today, NZD could trade on market risk appetite.
Pound (GBP) boosted by PMI survey
The pound (GBP) rallied yesterday after the UK’s preliminary services PMI for December outpaced expectations, showing an unexpected acceleration in activity this month.
In addition, the PMI contained signs of persistent inflation in the services sector, thereby leading markets to trim Bank of England (BoE) interest rate cut bets.
The UK’s latest labour market report is due this evening. If unemployment held steady and wage growth ticked higher in the three months to October, Sterling could strengthen.
Euro (EUR) wobbles on mixed PMIs
The euro (EUR) was mixed yesterday following its own PMI results for December.
Although the Eurozone services sector unexpectedly returned to growth this month, overall private sector activity remained in contraction.
Tonight, Germany’s economic sentiment index for December is due out. Another decline in morale in the Eurozone’s largest economy could weigh on EUR exchange rates.
US dollar (USD) unsure as markets brace for Fed
The US dollar (USD) also faced an uncertain start to this week’s session, with a shifting market mood and mixed PMI results seeing USD wobble.
Furthermore, investors were reluctant to place any aggressive bets on the ‘greenback’ ahead of the Federal Reserve interest rate decision later this week.
Looking ahead, the US dollar could catch some bids tonight. New US retail sales data is expected to show another solid month of sales growth in November.
Canadian dollar (CAD) wavers alongside oil
Wavering oil prices left the crude-linked Canadian dollar (CAD) lacking support yesterday, with the currency trading sideways against many of its rivals.
Canada’s latest inflation figures are out today. An uptick in inflation could dampen Bank of Canada (BoC) rate cut bets, thereby boosting the ‘loonie’.
Data releases
17:00 GBP Unemployment Rate (Oct)
20:00 EUR German ZEW Economic Sentiment Index (Dec)
23:30 CAD Inflation Rate (Nov)
23:30 USD Retail Sales (Nov)