US dollar rebounds as services PMI beats forecasts
Philip McHugh January 8th 2025 - 2 minute read
Pound (GBP) subdued in absence of data
The pound (GBP) was subdued yesterday as a lack of UK economic data left Sterling rudderless.
As a result, GBP held steady against some of its weaker peers but slipped against stronger rivals.
UK data remains thin on the ground today, potentially leaving the pound muted once again.
Euro (EUR) struggles as CPI fails to impress
The euro (EUR) softened yesterday, with the latest Eurozone consumer price index failing to support the single currency.
The CPI printed as expected, with inflation accelerating from 2.2% to 2.4% in December. Following the surprisingly sharp rise in German inflation released on Monday, Tuesday’s Eurozone figures disappointed EUR investors.
This morning, downbeat German factory orders and retail sales are applying some pressure to EUR. An expected decline in Eurozone economic sentiment could add to the euro’s headwinds later today.
US dollar (USD) recovers as PMI beats expectations
The US dollar (USD) initially weakened yesterday amid a risk-on market mood and hopes that Donald Trump may not enact sweeping trade tariffs when he takes office later this month.
USD was then able to bounce back in the afternoon as the latest ISM services PMI showed a stronger-than-expected expansion in activity last month.
New US jobs data is due out this afternoon, including the latest ADP employment report and initial jobless claims. In the evening, hawkish Federal Reserve meeting minutes could support the US dollar.
Canadian dollar (CAD) flat despite rising oil prices
The Canadian dollar (CAD) gained ground yesterday as rising oil prices and a recovering US dollar both boosted the ‘loonie’.
Today, the Canadian dollar’s fortunes may be tied to oil price dynamics and CAD’s positive correlation with USD once again.
Australian dollar (AUD) falls despite hotter inflation
The Australian dollar (AUD) weakened overnight, despite Australia’s latest monthly CPI indicator showing an uptick in inflation, as fears of a US-China trade war hit the ‘Aussie’.
New Zealand dollar (NZD) muted amid lack of data
The New Zealand dollar (NZD) was subdued overnight as a lack of data and cautious mood dampened the currency’s appeal.
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Written by
Philip McHugh