The US dollar regained ground against most of its major FX trading counterparts, although it did have trouble extending its wins to the Japanese yen. Risk aversion from geopolitical tension appear to be favoring the lower-yielding dollar for now, as the US and its partner nations just recently launched another round of airstrikes against ISIS in Syria.
Data from the US was strong, as the flash manufacturing PMI held steady at 57.9 while the Richmond manufacturing index improved from 12 to 14 instead of dipping to 10. US new home sales and crude oil inventories data are due today.
The euro struggled to hold ground in recent FX trading but ended up weaker to the yen and the dollar. Data from the euro zone was mixed, although most German and French PMIs came in the red. Only the French manufacturing PMI and German services PMI surprised to the upside while the rest of the figures, including the euro zone overall readings, came in the red. German IFO business climate data is due today and the index could fall from 106.3 to 105.9.
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The pound tried to advance in recent FX trading even though UK data came in weaker than expected. BBA mortgage approvals fell from 42.7K to 41.6K while public sector net borrowing increased to 10.9K. For today, there are no major reports due from the UK, which suggests that the pound could be influenced mostly by risk sentiment.
The franc had a volatile FX trading day although there were no reports released from Switzerland. Weaker than expected euro zone PMI also weighed on the franc, as this increased the odds of further easing from the ECB and the potential for intervention from the SNB. The Swiss UBS consumption indicator is due today, along with the SNB quarterly bulletin.
The yen had a mixed FX trading performance as it held steady to the dollar but gained ground to the euro and some of the commodity currencies. There were no reports released from Japan then and none are due today, leaving the yen functioning mostly as a counter currency.
The Australian dollar got a bit of a boost from better than expected Chinese HSBC flash manufacturing PMI, as the index improved from 50.2 to 50.5 instead of falling to 50.0. However, Canada’s retail sales report fell short of expectations, as the headline figure marked a 0.1% decline while the core version of the report showed a 0.6% drop. New Zealand trade balance came in better than expected, with a smaller deficit of 472 million NZD versus the previous 724 million NZD and the estimated 1125 million NZD deficit. There are no major reports due from the comdoll economies today.
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