This morning, the US dollar is backing off slightly after solid gains yesterday despite below par US manufacturing PMI. Traders are skimming off profits this morning ahead of the big economic items.
The pound slumped yesterday, with a negative bias this morning. UK manufacturing PMI dropped more than expected, while net lending to individuals also disappointed. The GBP/USD is now down 1.25% on the week. The EUR/GBP has risen again above the 0.8800 level.
Other dollar pairs have followed suit, with the EUR/USD extending its losing run, while the AUD/USD is rallying after follow-on losses yesterday.
The USD/JPY is slipping back slightly after follow on buying yesterday. Yen pairs are generally mixed. With gains for the AUD/JPY and losses for the EUR/JPY and GBP/JPY.
The USD/CHF rallied again yesterday, getting closer to parity.
Coming up today, we have UK construction PMI at 09.30.
This is followed by European preliminary flash GDP at 10.00.
US ADP non farm employment change is at 13.15, followed by US crude oil inventories at 15.30.
Buba president Weidmann speaks at 16.30.
The FOMC statement and funds rate is at 19.00.
The Canadian dollar continues to out-perform, helped by bullish comments from the BOC’s Poloz. The Loonie’s rally has also been supported by oil prices stabilising above $70.
Meanwhile the euro continues to suffer, putting the two currencies on opposite paths.