January 4, 2016: The JPY is the strongest. The NZD is the weakest.
The first day of trading for the new year, has the JPY as the strongest currency, while the NZD is the weakest. The JPY has been supported as a safe-haven currency. Worse than expected China data, tensions in the Middle East, and a tumbling stock market (S&P down 40 points in pre-market trading/Eurostoxx down 3.21% and the Dax down -4.3%/the Shanghai composite lost 6.86%) has traders looking to the JPY as a safe haven.
On the other extreme the NZD and the AUD are the weakest as global economic concerns has traders thinking lower demand for their currencies and risk trades are sold.
The USD is in between with gains against the AUD, NZD and CAD and down against the EUR, GB{, JPY and CHF.
Volatility is off to a strong start with the ranges for the major currency pairs outpacing the 22-day average (about a month of trading - see lower chart below). In fact, nearly all the major cross currencies are trading above the averages. Lots of pairs are also trading near extreme levels as NA traders enter for the day.
PMI/ISM data is out in the US at 9:45 (Markit PMI 51.1 est vs. 51.3 last) and 10 AM (ISM Mfg Index - 49.1 vs 48.6 last month). Construction spending will also be released with est of +0.7% vs 1.0% last month. Later this week....US Employment (estimates are around 200K). German CPI will be released at 8:00 AM ET as well today. The regional CPI suggest 0.3% gain.
