The US dollar weakened against most of its peers even though data from the US economy came in strong. Risk appetite came into play, leading traders out of the safe-haven dollar despite positive expectations for Friday’s NFP. The ADP report showed a 214K gain in hiring versus the projected 185K increase but the previous reading was downgraded. Initial jobless claims and the ISM non-manufacturing PMI are lined up today.
The euro managed to advance against the lower-yielding currencies but was still in a weak spot against the comdolls. Data from the euro zone was mostly weaker than expected, as Spain reported a higher increase in unemployment while the region’s PPI showed a sharper than expected drop. Final services PMI readings from its top economies and euro zone retail sales data are due today.
The pound was able to score some gains even though the UK printed another downbeat PMI reading. The construction PMI fell from 55.0 to 54.2 in February versus the projected gain to 55.5. For today, the services PMI is due and a drop from 55.6 to 55.1 is eyed and a weak reading might spur losses for the British currency.
The franc was able to rake in a few gains when the Swiss GDP beat expectations. The economy grew 0.4% in Q4 2015, higher than the projected 0.2% figure and the previous 0.1% contraction. There are no reports up for release from Switzerland today, keeping risk sentiment in play.
The Japanese yen chalked up another losing day when risk appetite remained in the financial markets. There were no reports out of Japan yesterday and there are no catalysts lined up today, which suggests that another risk-on day might spur more losses for the yen.
Commodity Currencies (AUD, NZD, CAD)
The Aussie carried on with its climb following a strong GDP release. The report showed that the Australian economy grew 0.6% in Q4 2015 versus expectations of a 0.5% expansion. Crude oil inventories showed another strong buildup in stockpiles, temporarily weighing on prices, but the slowdown in production led to a quick boost. Australia’s trade balance beat expectations with a smaller than expected 2.94 billion AUD deficit and a 1% gain exports.