Pound (GBP) Slips as Retail Sector Profits Tumble
A vulnerable Pound (GBP) initially fell against its rivals on Friday. An unexpected slump in November’s retail sales weighing on Sterling.
However, Sterling was able to recoup some of these losses later in the day after the UK’s latest PMI releases reported the vital services sector avoided a contraction this month.
Further evidence of a downturn in the UK’s manufacturing sector could deepen GBP’s losses today. December’s industrial trends orders are expected to fall.
Euro (EUR) Underpinned by Positive PMI Release
The Euro (EUR) firmed at the end of last week, as PMI data from the bloc printed above expectations.
Manufacturing activity in the Eurozone hit 47.8 as opposed to the 47.1 expected, while the services PMI rose to 49.1 for December. Later in the European session, the Euro area’s trade deficit shrank rather than expanding, further buoying the single currency.
Looking ahead, will another improvement in German business sentiment offer some more support to the Euro this morning?
US Dollar (USD) Drops after Disappointing PMI Data
The US Dollar (USD) initially firmed on Friday. The currency found support from a retreat in global risk appetite and uptick in US Treasury bond yields. Hawkish signals from the Federal Reserve also helped limit the currency’s losses.
Disappointing PMI data later reversed the bulk of these gains, however. December’s data indicated a larger-than-forecast contraction in both the manufacturing and service sectors.
The US Dollar will see no significant data today. The currency will therefore likely be driven by any shifts in risk appetite.
Canadian Dollar (CAD) Drops after Oil Price Fall
The Canadian Dollar (CAD) was pulled lower on Friday by a downturn in crude oil prices. A weak US Dollar also weighed on CAD.
A cooldown in October’s PPI could weigh on the currency today if investors pare back rate hike bets.
Australian Dollar (AUD) Buoyed by China Optimism
The Australian Dollar (AUD) ticked higher overnight, with the currency being buoyed by the news that Beijing is ready to restore ties with Canberra.
New Zealand Dollar (NZD) Dented by Cautious Mood
The New Zealand Dollar (NZD) ticked lower in overnight trade as a prevailing risk-off mood limited the appeal of the high-yield ‘Kiwi’.