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EUR Boosted by German CPI, GBP Fluctuates before Manufacturing PMI

Pound News: PMIs in Focus this Week

With most markets closed for the New Year break, the Pound had a fairly static start to 2018. Sterling could fluctuate today in response to the first influential UK news of the year- the nation’s manufacturing PMI for December.

PMIs will remain in focus over the rest of the week too, with the construction measure due out tomorrow and the all-important services gauge set for release on Thursday. As the services measure accounts for over 70% of total GDP, that result will be particularly influential. If the index improves from 53.8 to 54, as forecast, Sterling could climb.

Euro News: EUR Bounces Higher on Sturdy German CPI

Euro exchange rates were lifted last Friday as Germany’s consumer price index came in at 0.6% on the month and 1.7% on the year – beating forecasts of 0.5% and 1.5%.

If the uptick in German consumer price pressures bolsters inflation in the Eurozone as a whole it could increase the odds of the European Central Bank (ECB) making adjustments to monetary policy over the course of 2018.

Today’s final manufacturing PMI readings for the Eurozone and its largest economies could have an impact on Euro exchange rates, but investors will also be looking ahead to tomorrow’s German unemployment data.

The German unemployment rate is believed to have fallen from 5.6% to 5.5%.

US Dollar News: Fed Meeting Minutes in Focus

US Dollar exchange rate fluctuations could occur today following the release of the US manufacturing PMI for December if the result differs from the initial forecast of 55.

However, the publication of minutes from December’s Federal Open Market Committee (FOMC) meeting could prove more influential tomorrow. Any hints that rates could be increased more than three times this year would be US Dollar supportive.

Canadian Dollar News: Rising Oil Prices Support CAD

Canadian Dollar exchange rates ended 2017 strongly thanks to a sturdy increase in oil prices.

Today’s RBC Canadian manufacturing PMI could give the ‘Loonie’ another lift if it shows an increase in output.

Australian Dollar News: Commodity Prices Bolster the ‘Aussie’

The risk-correlated Australian Dollar has benefited from rising commodity prices and largely positive domestic data in recent sessions.

Although the AiG Performance of Manufacturing Index for December slid from 57.3 to 56.2, the CBA Australia PMI Mfg rose from 56.3 to 57.1 and the AUD Commodity Index rallied from 124.8 to 129.4.

China’s Caixin PMI also lent the ‘Aussie’ support by rising from 50.8 to 51.5.

 

Upcoming Data

Tuesday, 02 January, 2018

 

09:30              UK Markit Manufacturing PMI (Dec)

14:30              CAD RBC Canadian Manufacturing PMI

14:45             US Markit Manufacturing PMI

Alastair Archbold

Currency Dealer

01442 892 066

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