Pound (GBP) struggles amid UK economic headwinds
The pound (GBP) weakened on Thursday amid a continued lull in impactful UK economic releases.
Sterling sentiment was also suppressed against mixed signals from the retail sector over the Christmas period, with many firms reporting that subdued consumer confidence left many households cautious about discretionary spending.
UK economic data remains in short supply today, likely leaving the pound to trade without a strong directional bias.
Euro (EUR) buoyed by strong German factory orders
The euro (EUR) firmed yesterday as EUR investors welcomed surprisingly strong factory orders data from Germany.
Order growth soared 5.6% in November and helped bolster hopes that the Eurozone’s largest economy is emerging from the other side of a prolonged industrial slump.
Meanwhile, the euro’s gains could be tested today after Germany’s latest trade figures reported a shock contraction in exports in November.
US dollar (USD) strengthens in risk-off trade
The US dollar (USD) appreciated on Thursday as geopolitical uncertainty drove investors toward safe-haven assets.
However, tempering the upside in USD were last week’s initial jobless claims, amid a rise in new unemployment claims.
Centre stage today will be the latest US payroll report. If December’s data points to a US labour market that continues to soften, it's likely to bolster dovish Federal Reserve rate bets and pull the US dollar lower.
Canadian dollar (CAD) underpinned by rising oil prices
The Canadian dollar (CAD) trended broadly higher yesterday, with the commodity-linked currency catching bids amid a notable rise in oil prices.
However, these gains may be tested later today as local data is expected to report that Canada’s unemployment rate began to rise again in December.
Australian dollar (AUD) slides as Chinese inflation underwhelms
The Australian dollar (AUD) retreated in overnight trade as softer-than-forecast Chinese inflation figures reflected poorly on the ‘Aussie’.
New Zealand dollar (NZD) dented by cautious trade
The New Zealand dollar (NZD) also weakened overnight on Thursday as it was buffeted by a risk-averse market mood.
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