Euro Weakens Amid Poor Data from Eurozone
Weak factory orders from Germany and falling Eurozone retail sales put pressure on the euro. Australian inflation beats forecasts and keeps the Aussie dollar in focus. US labor market figures and FOMC minutes later today will provide further direction for markets. Commodities experience mixed movements. Major currencies also experience mixed movements.
Key Data Out Today
- Eurozone Retail Sales disappointed in November, showing a -0.6% decline MoM but grew 2.5% YoY, suggesting mixed consumer momentum.
- German Factory Orders fell sharply, down -5.4% MoM, signaling ongoing industrial sector struggles.
- Australian CPI came in at 2.3% YoY, surpassing forecasts, boosting speculation around RBA’s future policy moves.
- US ADP Employment Change is in focus. It is expected to show 140K jobs added for December. This is alongside Initial Jobless Claims at 218K.
Commodities
- Gold remained stable at $2651.64 (+0.08%), with Silver also slightly higher at $30.10 (+0.06%).
- Crude Oil prices gained, with WTI at $75.16 (+1.23%) and Brent at $77.76 (+0.92%), buoyed by stronger demand outlooks.
- Natural Gas surged by +4.83%, trading at $3.62/MMBtu, as colder weather drives demand in the Northern Hemisphere.
Currency Movements
EUR/USD
- EUR/USD: Lower at 1.0322 (-0.17%), weighed by disappointing Eurozone retail sales and German factory orders.
GBP/USD
- GBP/USD: Down to 1.2447 (-0.24%), with the pound reflecting cautious sentiment as broader markets await US data.
AUD/USD
- AUD/USD: Slightly lower at 0.6220 (-0.16%), despite stronger-than-expected Australian CPI figures at 2.3% YoY.
NZD/USD
- NZD/USD: Trading lower at 0.5622 (-0.43%), following declines in risk-sensitive assets.
USD/JPY
- USD/JPY: Modestly higher at 158.21 (+0.08%), with the dollar steady ahead of US employment data.
USD/CNY
- USD/CNY: Up to 7.3508 (+0.12%), reflecting mild dollar strength amid subdued Chinese sentiment.
USD/CHF
- USD/CHF: At 0.9116 (+0.20%), as markets lean towards safe-haven flows.
USD/CAD
- USD/CAD: Steady at 1.4365 (-0.06%), with the loonie supported by higher crude oil prices.
USD/MXN
- USD/MXN: Higher at 20.38 (+0.25%), as the peso faces headwinds from risk-off sentiment.
USD/INR
- USD/INR: At 85.86 (+0.06%), showing balanced movement as markets eye US jobs data.
Market Outlook
- US ADP and Jobless Claims data later today will provide key insights into the labor market. They will also set the tone for Friday’s Non-Farm Payrolls.
- FOMC Minutes will shed light on the Fed’s future monetary policy trajectory.
- Eurozone Consumer Confidence and Producer Price Index will add further clues about regional inflation trends.