Forex Today: USD selling extends into Europe, ECB, US data eyed
We had a volatile Asian session today, with US dollar accelerating losses against its main competitors, in wake of less hawkish FOMC minutes. The yen benefited the most from broad based USD softness, while the Antipodeans also extended its advance on the back of upbeat Chinese services PMI report, which showed that the index hit 17-month tops.
Also, a rally in the offshore yuan in Hong Kong pushed the onshore yuan higher against the US dollar, knocking-off USD/CNY to five-week lows.
Later today, the European calendar offers the PPI numbers from the Euroland ahead of the UK services
Apart from the data, BOE Chief Economist Andy Haldane is due to speak at the Institute for Government, in London pre-US open.
Main topics in Asia
EUR/USD jumps above 1.05 on Fed’s ‘recursive backtracking’
Offered tone around USD gathered pace in Asia, pushing the EUR/USD pair to a session high of 1.0540 on signs the Fed is backtracking from its hawkish view in December.
PBOC sets USD/CNY at 6.9307 vs 6.9526
PBOC sets USD/CNY at 6.9307 vs 6.9526
NZD/USD: Bulls offered respite by upbeat China services PMI
The recovery in the US dollar across the board appears to gain traction last hour, triggering a fresh sell-off in NZD/USD from just a thread line short of 0.7000 levels, only to find fresh bids near 0.6970 region following the release of better-than expected Chinese services PMI data.
Overnight Hibor rate fixed at 38.335%, highest since Jan 12, 2016
Hong Kong’s offshore yuan overnight borrowing rate (HIBOR) has been fixed at 38.335% versus 16.94767% previous fix.
Key focus for the day ahead
UK services PMI likely to post a small gain to 55.7 in December - TDS
Analysts at TDS note that markets are looking for the UK services PMI to slip from 55.2 down to 54.7 in December.
Overnight Hibor rate explodes to 69.4% - RTRS
Reuters reporting headlines that overnight implied deposit rate for offshore yuan in Hong Kong (HIBOR) spikes to 69.4%.
GBP/USD pushes higher to 1.2360 ahead of PMI
The British Pound is following the rest of the risk-associated peers on Thursday, lifting GBP/USD to daily highs around 1.2360.
US: Expect headline nonfarm payrolls to moderate in December – Deutsche Bank
Analysts at Deutsche Bank suggest that the main event this week will be the December employment report from the US which will be released on Friday.