Pound Sterling

UK and Eurozone PMIs Miss Forecasts as Coronavirus Restrictions Hit Business Activity

Pound News: Sterling Pressured as Britain’s Services Sector Falls Short

While Britain’s key services sector continued to recover slightly last month, it was not able to recover as much as forecast. Britain’s services PMI came in at 49.4 according to Markit’s December report, still indicating a contraction in activity.

This dip in services activity, combined with Britain’s third national lockdown, is keeping investors anxious that the nation’s economy could take another severe hit from the coronavirus pandemic in the coming months.

Most of this week’s notable UK data has been published now, which will leave Sterling influenced by coronavirus developments in the coming days.

Euro News: Shared Currency Resilient despite PMI Miss

The Eurozone’s services and composite PMIs fell short of projections in this morning’s print. Despite this though, the Euro remained resilient as the data still showed a solid improvement over November.

The Euro is also more appealing as it gains on weakness in rivals like the Pound and US Dollar.

The Euro could come under pressure tomorrow as December’s inflation rate is forecast to show the bloc remain in deflation and retail sales are set to show a drop November.

US Dollar News: Democrat Party’s Senate Gains Weigh on USD

Investors sold the US Dollar overnight as the US Democrat Party won a seat in Georgia’s Senate runoffs. With one Senate race still to be called, the Democrat Party could take control of the Senate and boost government spending in the coming years.

A ‘blue wave’ in US Congress could boost US fiscal stimulus spending, in turn increasing global risk appetite and weighing on safe-haven demand for the US Dollar.

The Federal Reserve’s latest meeting minutes report will be published tonight, while tomorrow’s US non-manufacturing PMI data from ISM could drive additional movement.

Canadian Dollar News: Higher Oil Prices Keep CAD Buoyant

While the Canadian Dollar’s strong streak is running low on steam, prices of oil remain strong and continue to support the oil-correlated Canadian Dollar.

A surprise oil output cut, combined with Democrat Party performance in the Georgia Senate runoffs, has helped boost oil prices.

Canadian trade balance and Ivey PMI data will be published tomorrow, with shifts in oil prices also influencing the Canadian Dollar as well.

Australian Dollar News: Risk Sentiment Rises on US Political Hopes

The risk and trade-correlated Australian Dollar has seen its appeal boosted further by the latest US political developments. If the Democratic Party wins the US Senate runoffs in Georgia, it will take control of the Senate and could lead to more fiscal policy stimulus, increasing risk appetite.

Australia’s November trade balance report tomorrow and market sentiment will drive Australian Dollar movement through tomorrow’s session.

Upcoming Data

Thursday, 7th January

00:30    Australian Trade Balance

07:00    German Factory Orders

08:30    Eurozone Construction PMI

09:30    UK Construction PMI

10:00    Eurozone Confidence

10:00    Eurozone Inflation Rate

10:00    Eurozone Retail Sales

13:30    Canadian Trade Balance

13:30    US Trade Balance

15:00    Canadian Ivey PMI

15:00    US Non-Manufacturing PMI