Australian dollar (AUD) fluctuates amid mixed market mood
The Australian dollar (AUD) traded in a wide range at the start of this week. The ‘Aussie’ was initially buoyed by a positive revision to Australia’s latest PMI.
However, this gave way to volatility later in the session amid a skittish market mood.
In the absence of any notable domestic data, the Australian dollar is likely to remain sensitive to market sentiment through today’s session.
New Zealand dollar (NZD) choppy in uneven trade
The New Zealand dollar (NZD) also fluctuated during Monday’s session as a result of the mixed market mood.
New Zealand data is in short supply today, which may leave movement in the ‘kiwi’ tied to market risk dynamics
Pound (GBP) muted as services PMI revised lower
The pound (GBP) struggled to attract support yesterday, following the release of the UK’s latest services PMI.
Fresh concerns over the UK’s economic trajectory were raised after December’s finalised index was revised lower.
Lingering UK economic concerns may act as a headwind for Sterling today, in the absence of any notable UK data.
Euro (EUR) buoyed by rising German inflation
Germany’s latest consumer price index helped to underpin the euro (EUR) on Monday.
December’s stronger-than-expected uptick in inflation was seen as trimming European Central Bank (ECB) interest rate cut bets, although an expected January rate cut limited the upside in the single currency.
The spotlight today will be on the release of CPI figures for the Eurozone as a whole. If Germany’s sharp acceleration in inflation is mirrored across the bloc, the euro may rally.
US dollar (USD) tumbles on Trump tariff hopes
The US dollar (USD) got off to an abysmal start this week, after a report suggested that Donald Trump’s advisers are reportedly only seeking to impose tariffs on critical imports, rather than the widespread tariffs outlined by the President-elect during his campaign.
While Trump later refuted the report, it still curbed some of the US dollar’s recent strength, which has been driven by the expectations his proposed tariffs would drive up inflation and limit Federal Reserve interest rate cuts.
The ‘greenback’ may look to claw back some of these losses later today, as the latest ISM services PMI is expected to report the US service sector accelerated last month.
Canadian dollar (CAD) muted amid Canadian political uncertainty
The Canadian dollar (CAD) was subdued on Monday, amid reports of the imminent resignation of Canadian Prime Minister Justin Trudeau.
Canada will publish its latest Ivey PMI later today, with the ‘loonie’ likely to rise if December’s index reports an acceleration in private sector activity.
Data Releases
20:00 EUR Inflation Rate (Dec)
01:00 CAD Ivey PMI (Dec)
01:00 USD ISM Services PMI (Dec)