Dollar rises broadly on safe-haven buying
|The greenback snapped its recent losing streak and ended higher against majority of its peers on Friday as fall in global stocks triggered risk-off trades. Sterling fell across the board on poor UK retail sales and PMI data.
On the data front, Reuters reported data firm IHS Markit said on Friday its flash U.S. manufacturing PMI accelerated to a reading of 59.1 in the first half of this month, the highest since May 2007, from 57.1 in December. Economists had forecast the index slipping to 56.5 in early January.
Versus the Japanese yen, dollar found renewed buying at 103.49 in Australia and rose to 103.61 in Asian morning and later rallied to session highs of 103.88 in New York on safe-haven usd buying due to weakness in global stocks.
Although the single currency extended its recent ascent and gained to 1.2177 as Asian open, price retreated to 1.2152 in European morning on recovery in usd. However, the pair then rose to an 8-day high of 1.2190 in Europe on cross-buying in euro before weakening in tandem with cable to 1.2155 but only to edge back to 1.2184 and then moved sideways.
Reuters reported a PMI covering the bloc's dominant service industry dropped to 45.0 from 46.4, exceeding expectations in a Reuters poll that had predicted a steeper fall to 44.5 and still a long way from historic lows at the start of the pandemic.
The British pound traded below Thursday's fresh 2-1/2 year peak of 1.3746. Cable met renewed selling at 1.3736 in Australia and tumbled to 1.3656 in European morning on safe-haven usd buying together with cross-selling in sterling and poor UK retail sales data. Despite recovering to 1.3698, the pair then dropped again after released of downbeat UK PMI data and later fell to session lows of 1.3636 in New York and then bounced to 1.3692 on short-covering.
Reuters reported UK retail sales volumes rose 0.3% in December versus economist expectations in a Reuters poll for a 1.2% increase, leaving them 2.9% higher than a year earlier, official figures showed on Friday. And the PMI for the services industry, which accounts for the vast bulk of Britain's private sector economy, fell to 38.8 in January from 49.4 in December, its lowest level since May and marking a third month of contraction. Factories fared much better, despite fading growth in output and a renewed decline in order books. The manufacturing PMI fell to 52.9 in January from 57.5 in December, remaining above the 50 dividing line for growth.
Data to be released this week :
Germany Ifo business climate, Ifo current conditions, Ifo expectations, EU business sentiment, economic sentiment, industrial sentiment, services sentiment, consumer confidence, and U.S. national activity index on Monday.
Australia market holiday, UK claimant count, ILO unemployment rate, employment change, average weekly earnings, CBI distributive trades, and U.S. redbook, monthly home price, Case-Shiller home price, consumer confidence, Richmond Fed manufacturing index on Tuesday.
Australia Westpac leading index, NAB business conditions, NAB business confidence, CPI, Japan coincident index, leading economic index, Germany GfK consumer sentiment, France consumer confidence, Italy trade balance, Swiss investor sentiment, and U.S. MBA mortgage applications, durable goods, durables ex-transportation, durables ex-defense, Fed interest rate decision on Wednesday.
New Zealand imports, trade balance, exports, Japan retail sales, Australia export prices, import prices, Swiss trade balance, Italy business confidence, consumer confidence, Germany CPI, HICP, U.S. building permits, GDP, GDP deflator, core PCE price index, PCE price index, trade balance, wholesale inventories, initial jobless claims, continued jobless claims, leading index, new home sales, KC Fed manufacturing index, and Canada building permits, average weekly earnings on Thursday.
Japan Tokyo core CPI, Tokyo CPI, unemployment rate, industrial output, consumer confidence, construction orders, housing starts, Australia PPI, France consumer spending, GDP, producer price index, Germany import prices, unemployment change, unemployment rate, GDP, Italy producer price index, U.S. employment wages, employment costs, personal income, personal spending, core PCE price index, PCE price index, Chicago PMI, University of Michigan sentiment, pending home sales, and Canada GDP, producer price index on Friday.
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