With the U.S markets closed focus shifts back to the Pound, which is under intense pressure as British PM struggles in the Commons.
Economic data released through Asian session this morning was on the lighter side, with key stats limited to 3rd quarter GDP numbers out of Australia and China’s November service sector PMI.
For the Aussie Dollar, the Australian economy grew by 0.3% quarter-on-quarter in the 3rd quarter, coming up well short of a forecasted 0.6% and 2nd quarter 0.9%. Year-on-year, the economy grew by 2.8%, coming up short of a forecasted 3.3% and 2nd quarter 3.4%.
According to the ABS,
The Aussie Dollar moved from $0.73450 to $0.73067 upon release of the figures, which came ahead of China’s PMI figures, with the softer growth number also coming up well below the RBA’s forecasts.
Out of China, the November services PMI came in at 53.8, coming in well ahead of a forecasted 50.7 and October 50.8.
The Aussie Dollar moved from $0.73107 to $0.73120 upon release of the figures before falling to $0.7314 at the time of writing, down 0.33% for the session.
Elsewhere, the Japanese Yen stood at ¥112.98, against the U.S Dollar, the Yen down 0.19% for the session, the Yen giving up some of Tuesday’s risk aversion gains, while the Kiwi Dollar was up 0.06% to $0.6934, the Kiwi finding support from an overnight jump GlobalDairyTrade price index, which jumped by 2.2%.
For the EUR, economic data scheduled for release is on the heavier side through the day, with key stats including November’s service sector PMI numbers for Spain and Italy and finalized numbers for France, Germany and the Eurozone and October retail sales figures out of the Eurozone.
While the EUR will show some response to the numbers, which are skewed in favour of the EUR, ECB President Draghi could pin back any EUR upside should there be any dovish policy chatter, the ECB President scheduled to speak in the early part of the day.
At the time of writing, the EUR down 0.06% to $1.1336, with today’s stats and Draghi the key drivers through the day.
For the Pound, economic data is limited to November’s service sector PMI that will provide the Pound with direction, forecasts being Pound positive, though we will expect the impact of the numbers to be overshadowed by the ongoing parliamentary debates on the Theresa May Brexit deal, any early signs of a vote to block the deal a certain negative for the Pound.
At the time of writing, the Pound was down 0.11% at $1.2705, with Brexit chatter remaining the key driver through the day.
Across the Pond, the markets will miss out on FED Chair Powell’s testimony, which has been cancelled as a result of George H.W. Bush’s passing, with President Trump having called for Wednesday to be a day of national mourning.
Economic data that had been scheduled for release included November’s ADP Nonfarm Employment change numbers, 3rd quarter nonfarm productivity and unit labour cost figures, finalized Markit service sector and composite PMIs and the market’s preferred ISM non-manufacturing PMI numbers.
Market concerns over a possible slowdown in the U.S economy has seen a further flattening in the yield curve that hammered the U.S equity markets on Tuesday, while the FED also seems to be unable to march to the same tune, FOMC member Williams’s talk of the need for continued rate hikes through next year seemingly on a different tune to that of FED Chair Powell and vice chair Clarida.
At the time of writing, the Dollar Spot Index was up 0.09 to 97.053, with the day likely to be a relatively quiet one in honour of Bush Snr.
For the Loonie, there are no material stats scheduled for release, leaving the Loonie in the hands of the Bank of Canada, which is scheduled to deliver its final policy decision of the year. Following some mixed stats, the Loonie could be on the bounce should there be talk of an early 2019 rate hike, the Loonie having lost some ground in the weeks after the close out of the new trade agreement.
The Loonie was down 0.08% to C$1.3272 against the U.S Dollar at the time of writing, the Bank of Canada the key driver through the day.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.