Pound News: Improved UK Deficit Not Enough to Boost Sterling
Although UK public sector net borrowing showed a much smaller uptick on the month than forecast the Pound (GBP) struggled to capitalise on this positive showing.
Even with the UK budget deficit bettering expectations in December GBP exchange rates remained in a bearish mood, thanks to lingering Brexit worries and domestic political jitters.
Unless today’s average weekly earnings data shows that wage growth picked up in the three months to November the appeal of the Pound is likely to remain limited.
Euro News: Eurozone Sentiment Surveys Continue to Better Forecast
Both the ZEW economic sentiment surveys and the Eurozone consumer confidence index proved stronger than forecast on Tuesday, boosting Euro (EUR) exchange rates.
These added to the positive picture of the Eurozone economy, encouraging hopes that the European Central Bank (ECB) will soon be encouraged to return to a more hawkish policy outlook.
While some loss of momentum is expected from the latest raft of Eurozone manufacturing and services PMIs, though, the Pound to Euro (GBP/EUR) exchange rate may not find any particular traction.
US Dollar News: USD Fails to Capitalised on End of Government Shutdown
With the US government shutdown at an end the US Dollar (USD) found some respite, even though market demand for the currency failed to pick up significantly.
As the Richmond Fed manufacturing index disappointed expectations investors saw little reason to favour the US Dollar over its rivals.
This afternoon’s US data could offer USD exchange rates a rallying point, so long as the world’s largest economy does not show any fresh signs of softness.
Canadian Dollar News: Trade Agreement News Provokes CAD Volatility
Worries over the future of NAFTA have kept the Canadian Dollar (CAD) under some degree of pressure this week, with investors still concerned that the trade deal could collapse.
Even so, with Canada and ten Asian nations reported to have finalised a new Trans-Pacific Partnership agreement markets saw fresh cause for confidence in the outlook of the Canadian economy.
If US crude oil production shows fresh signs of growth, though, the Pound to Canadian Dollar (GBP/CAD) exchange rate could find some support today.
Australian Dollar News: Failing Australian Confidence Dents AUD Rates
A sharp dip in the ANZ Roy Morgan weekly consumer confidence index weighed heavily on Australian Dollar (AUD) exchange rates yesterday, suggesting that the optimism of the New Year is fading.
Weakening iron ore prices added to the bearishness of AUD exchange rates, given the heavy reliance of the Australian economy on its mining sector.
If market risk appetite falters once again this could see the Australian Dollar losing further ground tonight.
New Zealand Dollar News: NZ Service Sector Remains in Solid State of Growth
While the New Zealand services PMI eased somewhat in December the sector continued to demonstrate solid growth, to the benefit of the New Zealand Dollar (NZD).
Naturally this encouraged investors to continue favouring the higher-yielding ‘Kiwi’ over its rivals, especially as the US Dollar failed to find any fresh support.
Tonight’s New Zealand consumer price index data is likely to provoke significant volatility for NZD exchange rates, even though no change is expected from the headline figure.
Wednesday, 24 January
09:00 Eurozone Manufacturing PMI
09:00 Eurozone Services PMI
09:30 UK Average Weekly Earnings
14:45 US Manufacturing PMI
14:45 US Services PMI
21:45 New Zealand Consumer Price Index
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