Forex news for January 2, 2015:
- US Dec ISM manufacturing 55.5 vs 57.5 expected
- New orders 57.3 vs 66.0 prior (lowest since May)
- ISM survey chairman: Drop in ISM ‘nothing to be concerned about’
- EUR/USD slumps to lowest since 2010
- Markit final US manufacturing PMI 53.9 vs 54.0 exp
- RBC Canadian manufacturing PMI 53.9 vs 55.3 prior
- USD/CHF hits parity for first time in 4 years
- German 5-year bobl yield breaks below zero.
- Fed’s Mester: Can imagine rates going up in the first half of the year
- US Nov construction spending -0.3% vs +0.4% exp
- US sanctions North Korea in response to Sony attack
- PIMCO Total Return Fund assets fell 13.5% in December
- S&P 500 down 0.7 points to 2058
- Gold up $7 to $1189 after falling as low as $1167
- WTI crude down 12-cents to $52.69
- USD leads, GBP lags
It was the worst day of the year for the pound sterling as it slid 0.258 pips to 1.5328. A couple things were interesting about the move, which began after the soft UK Markit PMI. The first is the slow pace of the move, it was steady rather than sharp. The second is that the ruble was the best performer up 3.8% — perhaps there’s a connection.
EUR/USD broke the 2012 low but held 1.20 in an epic battle that looked like the SNB defending the same level in EUR/CHF. The Draghi comments got the credit but the euro was actually an outperformer on the crosses so it was more of a strong-USD story.
It’s almost reckless to try and make too much sense out of market moves on the first trading day of the year as flows dominate. In any case, the US dollar gain was extremely impressive and all eyes will be on EUR/USD 1.20 at the open.
Another level to watch is in AUD/USD as a late fall sent it within a handful of pips from the 2012 low of 0.8067.
FX ticker January 2
