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.
Sterling is gaining ground again this morning in the wake of the UK’s latest labour market report. A larger-than-expected acceleration in wage growth in the three months to October is further dampening BoE rate cut bets.
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.
This morning, 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 this afternoon. 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’.
Australian dollar (AUD) dented by declining consumer morale
The Australian dollar (AUD) retreated overnight after new data showed an unexpected decline in Australian consumer confidence this month.
New Zealand dollar (NZD) softens in tandem with AUD
The New Zealand dollar (NZD) likewise weakened last night, due to NZD’s correlation with AUD and a cautious market mood.
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