Forex Trading Library

Forex Afternoon Wrap – 01/12

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RBA leaves cash rate unchanged at 2.0%

  • Australia AIG Manufacturing index 52.5 vs. 50.2 previously
  • Australia building approvals m/m 3.9% vs. -2.5%; y/y 12.3% vs. 5.7%
  • China PMI Manufacturing 49.6 vs. 49.9; non-manufacturing PMI 53.6 vs. 53.1
  • Caixin Manufacturing PMI 48.6 vs. 48.4
  • RBA leaves cash rate unchanged at 2.0%
  • Switzerland GDP q/q 0.0% vs. 0.2%; y/y 0.8% vs. 0.8%
  • BoE releases bank stress test results
  • Spain manufacturing PMI 53.1 vs. 51.7
  • Swiss manufacturing PMI 49.7 vs. 50.8
  • Italy manufacturing PMI 54.9 vs. 54.2
  • France manufacturing PMI 50.6 vs. 50.8
  • Germany manufacturing PMI 52.9 vs. 52.6
  • Eurozone manufacturing PMI 52.8 vs. 52.8
  • UK manufacturing PMI 52.7 vs. 53.6
  • Eurozone unemployment rate 10.7% vs. 10.8%
  • Canada GDP m/m -0.5% vs. 0.0%; y/y 0.0% vs. 0.4%

Later

  • New Zealand GDT price index
  • US Manufacturing PMI
  • ISM manufacturing PMI
  • Construction spending

The currency markets got off to a strong start this morning with the Asian currencies posting strong gains. The IMF approved the Yuan to be included in the Special Drawing Rights, marking the entry of the Chinese currency in nearly 35 years. The SDR is a weighted currency made up of the US Dollar, Euro, Yen, British Pound and now the Yuan.

The Australian dollar rallied 0.79% for the day at the time of writing with AUDUSD trading near 0.728. The Aussie found strong support with economic data including the RBA which left interest rates unchanged at 2.0%. The AIG manufacturing index was higher at 52.5 while building approvals posted strong gains, rising 3.9% for the month, beating estimates of -2.5% declines.

The Kiwi continued a second day of strong gains, with NZDUSD up nearly 1.0% for the day, trading at intraday highs of 0.665. The Kiwi posted strong gains despite no major news releases to go by, but the currency remains at risk ahead of the GDT price index data due for release later today.

The Japanese Yen remained mixed in today’s trading with USDJPY trading choppy posting gains of 0.05% for the day but not before posting strong losses, falling to intraday lows near 122.655. USDJPY managed to recover off the lows to push back to the opening price.

The European trading session was marked with manufacturing PMI numbers from Spain, Switzerland, France, Italy and Germany. The Eurozone manufacturing PMI came out as expected at 52.8. The Euro managed to rise higher on the data, with EURUSD up 0.46% at the time of writing, trading near intraday highs at 1.061.

The British Pound was soft today, up 0.09% with the GBPUSD trading near 1.507. The Cable posted session highs to 1.512 before falling back as UK’s manufacturing PMI was soft at 52.7 below estimates of 53.6

The US trading session kicked off with Canada’s GDP which showed a contraction of -0.5% for the month and remains flat on an annualized basis. USDCAD rallied strongly on the weak Canadian data, with USDCAD up 0.05% for the day posting a session high near 1.3392.

The remainder of the evening will see the New Zealand GDT data followed by US economic data including manufacturing and ISM PMI’s along with construction spending data.

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