The US dollar was the king of pips on Friday as risk aversion returned and data from the US beat expectations. The flash manufacturing PMI rose from 51.3 to 52.9, higher than the consensus at 51.9. There are no major reports up for release from the US economy today so traders could price in expectations for this week’s GDP release and FOMC statement.
The euro suffered a sharp selloff towards the end of the trading week when reports of a shooting in a Munich mall hit the newswires. Data from the euro zone earlier in the day was actually stronger than expected, with French flash manufacturing and services PMIs beating expectations. The German Ifo business climate index is due today and a drop from 108.7 to 107.7 is expected.
Traders dumped the pound upon seeing a sharp contraction in both manufacturing and services PMIs. The former fell from 52.1 to 49.1, higher than the estimated 47.8 figure but still a drop to contraction, while the latter slipped from 52.3 to a record low of 47.4. CBI industrial orders expectations data is due today and a decline from -2 to -6 is eyed.
The franc got a boost from its safe-haven appeal in the European region, as its counterparts were weighed down by weak data and attacks, but the Swiss currency was still no match to USD strength. There were no reports out of the Swiss economy on Friday and none are due today, which suggests that market sentiment could keep driving franc action.
The Japanese yen got a boost when BOJ Governor Kuroda made comments ruling out “helicopter money” and led traders to dismiss speculations of additional BOJ easing this week. However, in his remarks during the G20 conference over the weekend, it seemed as though ruling out “helicopter money” doesn’t necessarily mean that stimulus won’t be possible. There are no major reports out of Japan today so traders might price in expectations for the BOJ decision.
Commodity Currencies (AUD, NZD, CAD)
The comdolls were in a weak spot as risk-off vibes weighed on the higher-yielders last Friday. Data from Canada was somewhat upbeat, with CPI readings coming in line with expectations and retail sales data posting strong results. New Zealand’s trade balance is due next and a smaller surplus of 128 million NZD is eyed.