Pound Sterling (GBP)
The Pound has advanced moderately against the Euro and the US Dollar today, having experienced high levels of turbulence earlier in the week.
The last domestic data out of the UK saw Wednesday’s claimant count in December drop, the November unemployment rate remain at 4.8% and average earnings increase, both with and without bonuses.
The near-term is expected to bring a second speech from Theresa May, though the planned comments at the World Economic Forum (WEF) event in Davos are not forecast to cause anywhere near as much turbulence for the Pound compared to Tuesday’s announcement.
On what may be the biggest day of the week for the Euro, the single currency has been weak against the Pound but has risen against the US Dollar.
Notable news will consist of the first European Central Bank (ECB) interest rate decision of the year, which is expected in the afternoon.
No change is expected from the current 0% rate, so more noticeable Euro movement is likely to come from the following press conference by ECB President Mario Draghi.
US Dollar (USD)
On the last day of an Obama presidency, the US Dollar has been weak across the board, having dropped by -0.3% against the Euro and -0.5% against the Pound.
Wednesday afternoon brought positivity for the US, with inflation in December rising across most fields.
Despite this news and comments from Fed Chair Janet Yellen that gradual US interest rate hikes were likely in 2017, economists forecast that Yellen would clash with President Trump. This was attributed to growth forecasts; the Trump administration has adopted an extremely positive outlook on US economic growth, which some believe is unrealistic when compared to the Fed’s more conservative expectations.
Aside from any pre-inauguration jitters, the next US Dollar-influencing news is set to be this afternoon’s crude oil stocks change figure, which is expected to show a drop in stocks. This would raise the value of existing oil supplies and potentially boost the US Dollar in the process.
Australian Dollar (AUD)
Australian Dollar demand has been high today, with the Australian currency rising marginally against the Pound and more significantly against the US Dollar and Euro.
This comes despite unemployment in December rising from 5.7% to 5.8%; more positively, consumer expectations for inflation rose in January, while both full and part-time employment rose in December. The increase in the unemployment rate has been attributed to the December participation rate rising.
The last major Australian data of the week will be Friday’s early HIA new home sales figure, which previously showed a drop of -8.5%.
New Zealand Dollar (NZD)
The New Zealand Dollar has rallied significantly today, climbing by 0.3% against the Pound, 0.5% against the Euro and by 0.8% against the US Dollar.
As well as a weak US Dollar facilitating these gains, the New Zealand Dollar has also been bolstered by the ANZ Roy Morgan consumer confidence figure for January, which jumped from 124.5 to 128.7.
The next NZ news on offer will be Monday night’s services PMI for December, which previously posted at 57.9.
Canadian Dollar (CAD)
Canadian Dollar demand has been virtually non-existent today, with losses being recorded against the Pound, the Euro and the US Dollar.
Crude oil costs have recently risen, but yesterday’s Bank of Canada (BOC) announcements poured cold water on any investor optimism.
Although the Canadian interest rate was left untouched, the fact that a possible future rate cut was hinted at lowered confidence in the Canadian Dollar considerably.
This afternoon’s Canadian data will cover manufacturing sales in November, which are expected to rise from -0.8% to 1%.