The US dollar remained under pressure and an attempt to stage a serious rebound was met with selling. Still, the dollar index managed to stay away from its late Asian session low of 101.71, but an attempt to scale above 102.51 level in mid-session failed. The index was at 102.00 at the time of writing shortly after the release of an upbeat December Services ISM.
Dollar / yen was once again below 116 at 115.86, while euro / dollar was trying to hold the 1.0550 level.
In economic news, UK Services PMI surpassed expectations by coming in at 56.2 compared to 54.7 expected by economists. This was the latest indication that the UK economy had ended the year on a strong note following better-than-expected manufacturing and construction surveys. Nevertheless, the pound only held its ground versus the dollar around 1.2315 while euro / pound surged to as high as 0.8580. The pound was also down against the yen, to as low as 142.48.
In the Eurozone, producer prices in November returned from deflation and posted the first year-on-year rise since 2013, while the month-on-month increase reached 0.3% compared to expectations of a 0.1% rise.
In the US, weekly jobless claims fell much more than expected to 235 thousand, which was a 43-year low. The previous week’s claims were 263 thousand and a number below 250 thousand is relatively rare. The ADP private sector payrolls number for December was somewhat disappointing however, as it came in at 153 thousand compared to 170 thousand expected by economists. This could moderate expectations for tomorrow’s key nonfarm payrolls release. The ISM Services report exceeded forecasts by coming in at 57.2 compared with expectations of 56.6 reading. The latest reading was unchanged from the previous month’s number, which failed to excite the market much.
The Chinese yuan managed to stabilize during the European session, as the offshore yuan traded between 6.81 and 6.83. A strengthening yuan has surprised market participants during the past 2 days due to consensus predictions that the yuan was on a path of continued slow depreciation.
Gold was relatively strong as it climbed near the $1180 an ounce mark at 1179. US oil was slowly recovering from its sharp selloff on Tuesday to trade near the $54 a barrel level at 53.76.
Looking ahead to Friday, Australian trade figures, German industrial orders and Eurozone retail sales and economic sentiment will precede the week’s main economic highlight which is the US December employment report. Non-farm payrolls are expected to remain at 178 thousand while unemployment is forecast to tick up to 4.7% from 4.6%. Canadian employment numbers will also come out, followed by US factory orders later. Taking into account the volatility in the US dollar this week, a surprise in the employment numbers should have a substantial impact on the greenback.