Dollar Pulls Back from Lows

The dollar pulled back from its lowest levels against the euro and pound. UK Services and US employment data are in focus today.

Previous Day's Market Highlights

After starting the year on the backfoot, the dollar reclaimed some ground yesterday. EUR/USD pulled further back towards 1.20 after failing to break 2017’s high of 1.2092 on Tuesday. The dollar strengthened on the Fed’s meeting minutes but not enough for a lasting break below 1.20, while GBP/USD held above 1.35 after reversing from highs above 1.36 earlier in the day.
 
The Fed minutes indicated that the Fed continues to view a gradual rise in rates as appropriate—the Fed has projected three hikes in 2018—and referenced the board’s discussion about the potential implications of the Trump administration’s tax plans. Data-wise, the US ISM Manufacturing PMI surprised to the upside.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1238 1.1509 1.1223 2.49%
GBP / USD 1.3517 1.3613 1.3304 2.27%
EUR / USD 1.2028 1.2074 1.1717 2.96%
GBP/AUD 1.7214 1.7999 1.7219 4.33%
GBP / NZD 1.8978 1.9776 1.8939 4.23%
GBP / CAD 1.6925 1.7385 1.6868 2.97%

Today's Market Highlights

The main release this morning is the UK’s Services PMI (09:30 GMT), which traders will keep a close eye on, but which may have limited impact barring any deviations from projections of a slight tick higher.
 
US employment data is in focus this week, with ADP Employment Change and Initial Jobless Claims out this afternoon (13:15, 13:30 GMT) ahead of tomorrow’s NonFarm Payrolls and wage growth figures.
 
Signs of a strong jobs report tomorrow could strengthen the dollar, enabling it to recover some additional ground after year-end weakness, although EUR/USD may continue to see support around 1.20.   

Today's Economic Calendar

Time Currency Release Consensus Previous
09:30 GBP Services PMI (Dec) 54.0 53.8
09:30 GBP Consumer Credit (Nov) £1.500B £1.451B
13:15 USD ADP Employment Change (Dec) 190K 190K
13:30 USD Initial Jobless Claims (29 Dec) 240K 245K
13:30 CAD Raw Material Price Index (Nov) 4.5% 3.8%
13:30 CAD Industrial Product Price MoM (Nov) 0.8% 1.0%
14:45 USD Markit Services PMI (Dec) 52.4 52.4
16:00 USD EIA Crude Oil Inventories (29 Dec) -5.182M -4.609M
18:30 USD Fed's Bullard Speaks
00:30 AUD Trade Balance (Nov) 915M 105M