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Economic Data Puts the EUR, GBP, and USD in Focus

Economic data will have some influence, particularly on the EUR, which has eased back. Economic data suggests that the ECB’s optimism came too early…
Bob Mason
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Earlier in the Day:

It was a quiet day on the Asian economic calendar in the earlier hours of this morning.

There were no material stats to provide the majors with direction through the early part of the day.

A lack of stats left the majors in the hands of risk sentiment. Optimism over trade remained the market theme through the first Friday of the year. Volumes were on the lighter side, however, with the Japan markets closed.

For the Majors

At the time of writing, the Japanese Yen was up by 0.17% to ¥108.39 against the greenback. The Kiwi Dollar was down by 0.09% to $0.6696, with the Aussie Dollar down by 0.13% to $0.6984.

In the equity markets

Solid gains from the U.S supported the majors in the early part of the Asian session. The ASX200 was up by 1.33% at the time of writing, with the Hang Seng up by 1.00%. Sentiment towards trade remained the key driver early on.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Key stats include German unemployment and prelim inflation figures for December.

Barring a material pickup in inflationary pressure, Germany’s unemployment change figures for December will be the key driver.

Any jump in unemployment would test the EUR, which had been on a tear. Downside risks to the Eurozone economy remain. Thursday’s PMI numbers painted a bleak picture for labor market conditions… The Eurozone’s reliance on consumer spending remains, which makes the EUR more sensitive to today’s numbers.

At the time of writing, the EUR was up by 0.04% to $1.1177.

For the Pound

It’s another relatively quiet day ahead on the economic calendar, with December’s construction PMI in focus.

With the sector in contraction, any increase in the pace of contraction would weigh on the Pound, though downside would be limited.

Sentiment towards the British PM’s ability to deliver an EU-UK trade agreement is the key driver for the year ahead. Johnson will need to deliver on campaign pledges, however, and avoid a 2nd Scottish referendum.

At the time of writing, the Pound was up by 0.11% to $1.3159, with Dollar weakness delivering the upside.

Across the Pond

It’s also a relatively busy day on the data front. Key stats include December ISM manufacturing PMI numbers.

With the markets more sensitive to the ISM figures, expect some Dollar sensitivity to the numbers. Forecasts are Dollar positive, though any upside for the Greenback may be limited on the day

Outside of the numbers, any spike in tension between the U.S and Iran and even North Korea could test risk appetite on the day…

There is also the FOMC meeting minutes due out late in the day. With few surprises expected, any unexpected talk of a shift in policy would influence…

At the time of writing, the Dollar Spot Index was down by 0.11% to 96.738.

For the Loonie

It’s another quiet day on the economic calendar, with no material stats due out of Canada to provide direction.

The lack of stats will continue to leave the Loonie in the hands of sentiment towards trade and the effect of rising tensions in the Middle East on crude oil prices.

The Loonie was up by 0.02% to C$1.2979 against the U.S Dollar, at the time of writing.

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