• Shanghai share index down 1%, snaps 4 sessions of gains
  • Swiss December PMI 54.6, weaker than median forecast of 57.0
  • Euro zone December final manufacturing PMI unrevised at 51.6, 21-month high
  • UK December manufacturing PMI 54.1, demonstrably stronger than median forecast of 52.0 and 25-month high
  • Euro zone January sentix index -3.7 vs -5.5 in December and -3.5 median forecast. Highest level since June 2008
  • UK November mortgage approvals 60,518 vs 57,718 in October. Better than median forecast of 58,000 and highest since March 2008. November mortgage lending +£1.459 bln, better than median forecast of +£0.9 bln
  • Italian December CPI +0.2% m/m, +1.0% y/y – ISTAT

Bad start to the New Year for the dollar, which this morning has lost ground to all the majors bar the yen.

EUR/USD started around 1.4300 and sold off early to around 1.4280, where it ran into decent “sovereign” buy interest. This bought about a swift move back above 1.4300 with one particular major Asian central bank continuing to buy well above 1.4300. Sell orders in the 1.4330/40 area proved a barrier for awhile but eventually gave way and stops were tripped through 1.4350. The pairing eventually reached a session high 1.4416 before settling back slightly, presently at 1.4400.

Cable started around 1.6100 and fell initially before taking off in a moonshot. The main driver was talk of a UK clearer having decent-sized, dividend-related, buy interest. The talk was that the interest was lined up for the 11:00 GMT fix.

Sterling got another general lift along the way from a batch of strong data (see above) and cable made it all the way to a session high 1.6240 before running into a bout of heavy profit taking ahead of the fix. Cable sat around 1.6180 at the fix, and rallied back over 1.6200 just after, but has been unable to hold those gains. We’re presently back at 1.6185.

USD/JPY sits at 92.85 all but unchanged on the day after an early rally to a 93.21 session high fizzled out.

USD/CHF is off slightly on the day, down at 1.0330 from an early 1.0365, but a rally in the EUR/CHF cross has helped limit losses. The cross having reached a session low 1.4809 overnight in Asia is presently back up at 1.4878. Still talk of 1.4800 barrier option interest with protection lined up just ahead. Also some believe 1.4800 is the line drawn in the sand by the SNB. Weak Swiss PMI data (see above) also weighed on the swissy a little.