US Dollar Bolstered by Impressive Jobs Data, Euro Advances despite Inflation Miss

Find out how the major currencies have been performing and what movement we could see in the days ahead with our weekly exchange rate update.

 

EUR – Euro Dented by Cooling Inflation

Weaker-than-expected German inflation and a strong US Dollar exerted pressure on the Euro at the start of this week’s session. A subsequent rebound in the euro was then cut short after Germany reported a larger-than-expected fall in factory orders in November and Eurozone inflation also printed below expectations.

The publication of Germany’s GDP figures for 2022 will no doubt be the highlight for EUR investors next week. Will a sharper-than-expected slowing of growth push the Euro lower?

Top EUR data releases:

Jan 9 EUR German Industrial Production (Nov)

Jan 9 EUR Unemployment Rate (Nov)

Jan 13 EUR German GDP (2022)

 

USD – US Dollar Bolstered by Robust Jobs Figures

The US Dollar initially soared in bearish trade this week, before swiftly relinquishing the bulk of these gains as market sentiment improved again in the middle of the week. USD exchange rates then rallied again in the second half of the week on the back of some strong US jobs data.

Centre stage next week will be the publication of the US consumer price index. Another below forecast inflation reading could place considerable pressure on the US Dollar on Thursday.

Top USD data releases:

Jan 12 USD Inflation Rate (Dec)

Jan 13 USD Consumer Sentiment (Jan)

 

GBP – Pound Wavers on Mixed PMIs

The Pound fluctuated this week, initially rising on the back of an upwardly revised manufacturing PMI and reports a deal to end the rail strikes could be close. However news that UK faces the longest recession of all G7 nations, as well as a weaker-than-expected services PMI then left Sterling vulnerable in the latter half of the session.

The only GBP data of note next week will be the UK’s latest GDP figures. A weak growth reading in November could undermine the Pound if it raises concerns over the depth of the UK’s current recession.

Top GBP data releases:

Jan 13 GBP GDP (Nov)

Jan 13 GBP Industrial Production (Nov)

 

AUD – Australian Dollar Rebounds as China to Lift Coal Import Ban

The Australian Dollar got off to a shaky start this year. The ‘Aussie’ initially faltered as weak Chinese data and Covid concerns weighed on market sentiment. However, news that Beijing may lift its ban of Australia coal exports, coupled with risk-on flows helped AUD exchange rates fare a little better in the latter half of the week.

Next week will see the release of Australia’s latest trade figures likely drive movement in the ‘Aussie’. Will a narrowing of Australia’s trade surplus weigh on AUD exchange rates in the latter half of the week?

Top AUD data releases:

Jan 11 AUD Retail Sales (Nov)

Jan 12 AUD Balance of Trade (Nov)

 

ZAR – Rand Fluctuates in Mixed Trade

The South African Rand traded in a wide range over the past week. ZAR exchange rates initially rose, buoyed by risk-on flows and expectations the South African Reserve Bank (SARB) will continue to raise interest rates this year. However a souring mood and underwhelming PMI release saw the Rand shed a portion of these gains later in the week.

In the absence of any notable ZAR data next week, its likely any movement in the Rand is likely to be tied to market risk appetite. Could a cautious mood leave the Rand on the backfoot?

 

CAD – Canadian Dollar Firms Despite Oil Price Slump

The Canadian Dollar got off to a solid start this year. The commodity-linked currency climbing against the majority of its peers, despite a sharp drop in oil prices. A surprise drop in domestic unemployment also lent support to CAD at the end of the week.

Canada’s latest Ivey PMI could provide some modest support the ‘Loonie’ at the start of next week. Another rise in December’s index would bolster hopes Canada’s economy may have avoided a contraction in the last quarter of 2022.

Top CAD data releases:

Jan 9 CAD Ivey PMI (Dec)