Daily Brief

Daily Brief

See recent articles

PMIs the main drivers

USD

After a heavy day on Friday the US data-crunchers took it easy yesterday. The only statistic of any significance was the Census Bureau's measure of factory orders for November and even that was somewhat out of date, having been held up by the government shutdown. Orders were down by 0.6% on the month, marking a second consecutive decline and confounding the analysts who had forecast a 0.2% increase.

Today's list is not much longer, with the services sector purchasing managers' indices and the Redbook index of retail sales. This evening's State of the Union address is not guaranteed to get the USD moving but the president's ability to surprise investors is well-documented.

EUR

The bulk of this morning's Euroland ecostats were PMI readings from the services sector and they were not as bad as some had feared. Italy and France missed the cut, scoring 49.7 and 47.8 respectively. Spain came top with a 54.7 and Ireland was close behind at 54.2. Germany was almost in line with forecast at 53.0 and the euro zone as a whole came in at 51.2. The only other report was for retail sales, which fell 1.6% in December, as expected.

The numbers helped slow the decline of the EUR, which had jerked lower yesterday morning and again in Europe today. There was nothing specific to send it lower, just an underlying nervousness about the economy despite repeated assurances from the European Central Bank that recession is not around the corner. The EUR fell 0.2% against the USD.

CAD

The Loonie was out of the game on Monday, with no Canadian economic statistics to affect it and nothing new on the trade front. Yet again the biggest factor in its direction was the price of oil, which fell 4% before recovering most of the lost ground.

The CAD closely followed the price of WTI crude, felling first and recovering later. Its daily loss to the USD was a little over 0.1%.

GBP

Sterling spent Monday reacting badly to news that Nissan will not after all be building its new SUV in Britain. Although there was more than one factor in its decision the company said "the continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future". Investors fear that this will not be the last such pull-back: investment in the UK auto sector declined by 46.5% in 2018.

And all of a sudden the UK services sector is not looking too clever either. This morning's PMI came in at 50.1, a point below forecast and on the cusp of contraction. New orders fell for the first time in two and a half years and staffing levels declined for the first time since 2012 as a result of concern about the economic outlook. The PMI dealt another blow to the GBP, which is 0.4% lower on the day.

JPY

The yen tracked sideways through the New York session and overnight. It suffered three noticeable dips but came back into line without any apparent effort. The JPY is 0.1% lower on the day against the USD. 

Markit's services sector PMI went against the global trend when it improved by half a point to 51.6. Respondents noted "healthy inflows of new business from domestic clients" and "the outlook remained positive". 

USD awaits president's address to Congress

USD awaits president's address to Congress

EUR bogged down by economic worries

EUR bogged down by economic worries

CAD slavishly tracks oil prices

CAD slavishly tracks oil prices

GBP hurt by near-neutral services PMI

GBP hurt by near-neutral services PMI

JPY steady, unaffected by data

JPY steady, unaffected by data

Sign up for a free account

Sign up for a free account

Access our convenient and secure online platform to process your international payments. Manage beneficiaries and view payment status and history at the click of a button.

Find out more
FX business solutions

FX business solutions

We provide tailored services to help companies make international payments and manage their foreign exchange risk

Find out more