The U.S. Dollar was mostly unchanged overnight, while losing to the sterling, but remains down on the week as renewed trade concerns dominate headlines.
Overview
The dollar is losing across the board in early trading, however, following dismal private jobs data. ADP’s private employment print showed that companies only added 67K jobs in November, badly missing estimates of 135K jobs created. Last month’s print was also downwardly revised. The print may foreshadow a weak Non-farm payroll number on Friday. Economists expect the economy added 190k jobs in November.
Later this morning, ISM and Markit service data will cross the wire, hours after Chinese and European service data beat expectations. Remember on Monday, Chinese and European manufacturing improved, while U.S. manufacturing data disappointed and caused the dollar to sell-off. The same could happen this morning.
What to Watch Today…
- Service Data at 10 a.m.
Complete Economic Calendar can be found here.
AUD
The Australian dollar experienced heightened volatility overnight. The Aussie initially took a dive after the nation’s economic growth missed forecasts. Australia’s GDP expanded only 0.4% in the third quarter, missing estimates of a 0.5% gain. The slow growth led investors to up the chances the Reserve Bank of Australia would cut interest rates further next year and put downward pressure on the currency. However, the Aussie’s fortunes have quickly flipped versus its American counterpart following poor U.S. jobs data.
GBP
The British pound was the biggest winner overnight as market participants increase bets that the Conservative party will win next week’s election. Sterling is now at its strongest level since May versus the U.S. dollar and the highest level since 2017 against the Euro.
The pound strengthened despite poor data. The U.K.’s service sector, which accounts for the bulk of the economy, was the weakest since March in November. IHS Markit’s Purchasing Managers Index fell to 49.3 with 50 being the line between contraction and expansion.
