Pound (GBP) stable ahead of influx of key releases
The pound (GBP) began the week trading steadily as markets positioned for a busy run of UK economic announcements.
In the days ahead, investors will digest PMI readings, inflation data and retail sales figures, alongside the Bank of England’s (BoE) final interest rate decision of the year.
In the short term, Sterling could see a mixed response to the latest UK labour market figures. While unemployment rose to a four-year peak in October, wage growth slowed by less than economists had expected.
Euro (EUR) steady as industrial output improves
The euro (EUR) moved sideways on Monday following the publication of the Eurozone’s most recent industrial production data.
Factory output increased broadly in line with forecasts in October, with growth picking up from 0.2% to 0.8%. This helped to soothe concerns surrounding the bloc’s recent manufacturing downturn.
EUR investors now turn their attention to the Eurozone’s PMI surveys. Analysts anticipate another improvement in private sector activity this month, which may lend the single currency some support.
US dollar (USD) flat as markets await data
The US dollar (USD) struggled to find momentum at the start of the week as traders remained cautious ahead of a series of important US economic releases.
Demand for the ‘greenback’ was also undermined by a sharp downside surprise in the latest Empire State manufacturing index.
Today’s focus is on the US payrolls report. A weaker-than-forecast outcome could reinforce expectations of an earlier Federal Reserve rate cut and potentially drag the US dollar to new lows.
Canadian dollar (CAD) muted after soft inflation reading
The Canadian dollar (CAD) saw limited movement on Monday after Canada’s latest consumer price index missed expectations. Inflation was unchanged at 2.2% in November, rather than edging up to 2.3% as forecast.
With little in the way of domestic data due, CAD direction today is likely to be shaped by oil price movements. Ongoing softness in crude could act as a headwind for the ‘loonie’.
Australian dollar (AUD) pressured by weaker consumer confidence
The Australian dollar (AUD) slipped overnight after an unexpected deterioration in Australian consumer confidence during December. Despite the initial drop, the ‘Aussie’ later clawed back some of its losses.
New Zealand dollar (NZD) wavers alongside AUD
The New Zealand dollar (NZD) followed a similar pattern, falling earlier in the session before recovering ground overnight as it mirrored movements in the Australian dollar.
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