Today’s Currency News: US Dollar Soars to Two-Month High on Impressive Job Figures

Pound (GBP) Retreats in Spite of Upbeat Services PMI

The Pound (GBP) initially rallied on Wednesday as January’s final services PMI printed even higher than a preliminary estimate.

IHS Markit reported the UK’s services PMI rocketed up from 50 to 53.9 last month, outpacing an initial estimate that the index would rise to 52.9. This was the measure’s highest level since September 2018.

However the Pound struggled to maintain these gains, pulling back by the afternoon as it was knocked by lingering Brexit jitters.

In the absence of any notable data today, the continued focus on Brexit is likely to limit the appeal of Sterling.

 

Euro (EUR) Slumps on Dire Retail Sales Figures

The Euro (EUR) was put on the defensive on in the mid-week as markets were left aghast by the publication of the Eurozone retail sales figures.

According to Eurostat sales growth collapsed from 0.8% to -1.6% in December, the largest slump in sales growth since 2008.

Looking ahead, the Euro may remain on the back foot through today’s session after Germany reported a sharp contraction in factory orders last month.

 

US Dollar (USD) Surges on Bumper Jobs Figures

The US Dollar (USD) rocketed higher on Wednesday is response to a bumper ADP payroll report.

The data, which is often used as an earlier indicator for the more influential non-farm payroll figures, suggested the US private sector added 291,000 jobs last month, the largest expansion since 2015.

Coming up, will a hawkish outlook from the Federal Reserve’s Robert Kaplan push the US Dollar even higher this afternoon?

 

Canadian Dollar (CAD) Supported by Oil Rally

The Canadian Dollar (CAD) ticked higher on Wednesday, with the commodity-linked currency tracking oil prices higher after WTI crude jumped over 3% on reports of a breakthrough in the development of a coronavirus vaccine.

 

Australian Dollar (AUD) Advances as China Slashes Tariffs on US Goods

The Australian Dollar (AUD) trended higher overnight on Wednesday in response to Beijing’s decision to slash tariffs levied against hundreds of US goods in an effort to boost confidence in China’s economy amidst the coronavirus outbreak.

This helped offset the release of Australia’s latest retail sales figures, as Australia reported its first contraction in a year in December.

 

New Zealand Dollar (NZD) Steadies on Improved Risk Sentiment

After fluctuating through yesterday’s session, the New Zealand Dollar (NZD) finally stabilised overnight as China’s move to slash tariffs bolstered market risk sentiment.

 

Matthew Andrews

Contact Matthew Andrews


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