Forex news for North American trading on January 2, 2019:
- US Markit Manufacturing PMI for Dec (F) 53.8 vs 53.9 estimate
- Canada Markit Manufacturing PMI for December 53.6 vs 54.9 last month
- Trump: There was a glitch in the stock market last month
- Trump: 2019 could be controversial and tough
- New Zealand GDT price index +2.8%
- The GDT price index up 2.8% at the auction
- US Markit Manufacturing PMI for Dec (F) 53.8 vs 53.9 estimate
- Canada Markit Manufacturing PMI for December 53.6 vs 54.9 last month
Markets:
- S&P 500 up 3 points to 2510
- WTI crude oil up $1.19 to $46.60
- US 10-year yields down 3.7 bps to 2.65%
- Gold up $6.59 to $1283.70
- Yen leads, EUR lags
The yen put in a big day to start the year as risk aversion gripped markets after the earlier release of the soft Caixin China PMI. Even as equities rebounded, the FX market stayed in a risk averse mood, although some of the extremes were pared back.
EUR/USD fell to the lowest since Dec 16 as it crushed the recent rally in one fell swoop, falling 125 pips to 1.1342. It continued to make fresh lows late into the day.
It was a similar story in GBP/USD as it dropped 1% and briefly slipped below 1.2600. There wasn't any news behind the big moves in European currencies but there looks to be someone selling heavily as we get the year underway.
AUD/USD hit the lowest since February 2017 as stops were hit on a fall below 0.7000 and down to 0.6982. It bottomed early in US trading but the bounce was hardly inspiring.
It was more-inspiring for the Canadian dollar as it got a big lift from oil after testing the recent extremes. The pair eventually tested both sides of the holiday range but hasn't broken out.
USD/JPY fell to the lowest since June as it touched 108.71 at the lows. It got more of a tailwind for better equity market sentiment than elsewhere and climbed to 109.10 last. The S&P 500 had been down 35 points after the open (and 60 points in the futures market) but turned around to finish up slightly.
