The US dollar continued to rake in gains during Tuesday’s trading sessions since risk aversion stayed in play. Data from the US economy was once again weaker than expected, with total vehicle sales declining from 18.2 million to 17.3 million in December. For today, the ADP non-farm employment change report is due and a 193K increase is eyed, weaker than the previous 217K gain.


The euro was in a very weak spot after the release of weaker than expected CPI estimates, as this led some analysts to price in more dovishness from the ECB. The headline CPI estimate came in at 0.2% instead of 0.4% while the core version stood at 0.9% instead of improving to the projected 1.0% figure. In addition, some of the top economies announced negative revisions for their growth forecasts. On a more upbeat note, the German unemployment change report came in better than expected with a 14K reduction in joblessness. Services PMI readings from the region’s top economies are due today.


The pound barely made any gains after seeing stronger than expected construction PMI data since traders are paring their holdings ahead of today’s services PMI release. Analysts are expecting to see a drop from 55.9 to 55.6 to indicate a slower pace of industry expansion, although stronger than expected data could yield stronger gains for the pound.


The franc took its cue from the euro and slid lower against its forex peers, as there were no reports from Switzerland to keep the currency supported. There are still no reports lined up from the Swiss economy today so it might continue to trail the euro and be sensitive to market sentiment.


The yen scored another winning day, thanks to risk aversion extending its stay in the financial markets. There were no reports out of Japan then and none are due today, although the Japanese currency is off to an early strong start during the Asian session.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi seem to be gearing up for another losing day since the Chinese Caixin services PMI came in weaker than expected and spurred another drop in risk-taking. In addition, the dairy auction in New Zealand resulted to a 1.6% fall in dairy prices. In Canada, underlying inflation data also came in below expectations. The Canadian trade balance and crude oil inventories report are due next.

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