The US dollar had a volatile run on Friday as updates on tax reform and the ongoing investigation into Trump’s dealings with Russia pushed the currency around. In terms of data, the ISM manufacturing PMI turned out weaker than expected as it fell from 58.7 to 58.2 versus the consensus at 58.4. US factory orders data is due today and a 0.3% dip is eyed.
The euro gapped down over the weekend as more political troubles in Germany continued. Chancellor Merkel remains hard pressed to form a coalition government. Euro zone reports came in mostly in line with expectations as there were barely any revisions to final PMI readings. The Spanish unemployment change report and region’s Sentix investor confidence index are up for release today, and stronger than expected reports could revive the shared currency’s strength.
The pound staged a strong rally on more evidence that the EU and UK government could reach a Brexit deal before the next EU Summit on December 14. Investors remain hopeful that this week’s meeting between May and Juncker could confirm these rumors. UK manufacturing PMI also turned out stronger than expected as it advanced from 56.6 to 58.2. Construction PMI is due today.
The franc gave up a bit of ground on risk-taking at the end of the previous week. Swiss manufacturing PMI was actually stronger than expected as it climbed from 62.0 to 65.1 versus the forecast at 62.6. There are no reports due from Switzerland today so market sentiment could be in play.
The yen was also mostly weaker on risk-taking and North Korean jitters. The hermit nation has pledged to start a nuclear war with the US unless Russia agrees to be a guarantor state. Japan’s consumer confidence index is due next and an improvement from 44.5 to 44.8 is eyed.
Commodity Currencies (AUD, NZD, CAD)
The Loonie got back on its feet upon seeing stronger than expected jobs figures from Canada. The economy added 79.5K positions versus the estimated 10.2K gain and the earlier 35.3K figure. GDP also came in better than expected at 0.2% versus 0.1%. Data from Australia has been mostly weaker than expected so far this week, with quarterly company operating profits down 0.2% versus the projected 0.3% uptick.