Pound (GBP) rallies as data beats forecasts
The pound (GBP) strengthened yesterday, despite UK unemployment climbing to a four-year high, as the latest British jobs report showed signs of resilience and stubbornly high wage growth.
In addition, the UK’s preliminary services PMI for December beat forecasts to show an unexpected acceleration in activity.
However, this morning’s UK consumer price index has already wiped out yesterday’s gains. UK inflation cooled from 3.6% to 3.2% in November, much lower than the 3.5% forecast, prompting bets on multiple interest rate cuts from the Bank of England (BoE) over the coming months.
Euro (EUR) wavers higher amid mixed data
The euro (EUR) was mixed yesterday, although it managed to gain ground against weaker rivals, amid mixed economic data.
The Eurozone’s PMIs for December missed forecasts to show a decline in business activity this month. However, Germany’s ZEW economic sentiment index unexpectedly rose to strike a five-month high.
Germany’s latest business climate indictor is due out today. With little change anticipated, EUR may be muted. However, a surprise reading could lead to more notable movement in the euro.
US dollar (USD) weakens amid signs of slowing jobs market
The US dollar (USD) slipped to fresh multi-month lows yesterday as markets digested the latest US jobs data.
The long-delayed non-farm payrolls reports pointed to a weakening labour market, while US unemployment rose from 4.4% in September to 4.6% in November, reinforcing bets on multiple interest rate cuts from the Federal Reserve next year.
Looking forward, speeches from two Fed officials could determine USD’s direction today. If both policymakers strike a dovish tone, the ‘greenback’ could suffer further losses.
Canadian dollar (CAD) dented by falling oil prices
The crude-linked Canadian dollar (CAD) also faced selling pressure yesterday, as falling oil prices dragged the ‘loonie’ lower.
Turning to today, oil prices could continue to drive CAD movement amid a lack of Canadian data. A recovery in crude this morning could lift the ‘loonie’.
Australian dollar (AUD) muted amid cautious mood
The Australian dollar (AUD) was subdued overnight as a cautious mood dampened demand for the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) wavers in absence of data
The New Zealand dollar (NZD) was also muted last night amid a lack of data and uncertain market mood.
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