US Dollar (USD) Jumps amid Gloomy Trade
The US Dollar (USD) strengthened during yesterday’s session. Risk aversion swept markets, thereby boosting the appeal of the safe-haven ‘Greenback’.
A larger-than-forecast contraction in US factory orders only seemed to further rattle investors, thereby adding to USD’s gains.
Later today, the ISM services PMI is the focus for USD investors. An expected expansion in service sector activity could see the currency strengthen.
Pound (GBP) Directionless amid Lack of Data
The Pound (GBP) traded without a clear direction yesterday as a lack of UK economic data left the increasingly risk-sensitive currency exposed to the market mood.
This saw GBP stumble against its safer peers as investors grew more downbeat, although it was able to recoup earlier losses against some of its riskier rivals.
This morning, the UK’s final services PMI is due out. If it confirms an expansion in activity – or beats preliminary estimates – then Sterling may gain ground.
Euro (EUR) Subdued following Mixed German Data
The Euro (EUR) was also muted yesterday, with mixed German trade data stifling the currency’s potential. While the country’s trade surplus increased, exports unexpectedly shrank.
In addition, a risk-off mood supported the safer currency, but this was offset by EUR’s strong negative correlation with the rallying US Dollar.
Turning to today, the Eurozone services PMI this morning could impact the Euro if it differs from the preliminary estimate.
Canadian Dollar (CAD) Firms on USD Correlation
The Canadian Dollar (CAD) shrugged off earlier losses to climb higher yesterday afternoon. The upside came thanks to CAD’s positive correlation with USD.
Today, a lack of market-moving Canadian economic data could leave the oil-sensitive ‘Loonie’ to trade on crude prices.
Australian Dollar (AUD) Tumbles following RBA Decision
The Australian Dollar (AUD) plunged last night after the Reserve Bank of Australia (RBA) left interest rates unchanged.
New Zealand Dollar (NZD) Stumbles amid Cautious Trade
The New Zealand Dollar (NZD) also slipped overnight as a cautious mood weighed on the risk-sensitive ‘Kiwi’.