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The dollar index which trades against a basket of six major currencies traded higher on Tuesday as traders maintained a cautious mood ahead of central banks. Chinese Manufacturing PMI entered an expansionary region in January as economic recovery brightens.
USDCAD soared by +0.56% ahead of key economic data from both countries. In Canada, the gross domestic product is expected to remain at 0.1% on a month-on-month basis and rise to 3.50% from 3.10% yearly. The Conference Board is expecting consumer confidence to improve in January to 109. from 108.3. Adding to this, the Chicago PMI, API weekly crude oil stock, and Employment change index in the US will be due. The pair rose for the second consecutive day and may face a challenge at 1.3524.
AUDJPY shrank by -0.77% after data in Australia indicated that retail sales rode south in December coming in at -3.9% against a survey of -0.3%. The RBA showed a decline in credit issued to businesses and consumers in the private sector at 0.3% vs 0.5% anticipated. Retail sales in Japan rose more than expected in December along with industrial production at 3.8% and -0.1% respectively. Upbeat data from China failed to uplift the AUD against the Yen. Near-term support resides at 91.000 after the pair got rejected at 92.20.
EURNZD gained +0.57% in the aftermath of mixed data from the Eurozone. Eurostat showed that the preliminary GDP grew 0.1% in the 4th quarter of 2022 against the -0.1% anticipated. In Italy, GDP grew 1.7% [YoY] in the fourth quarter. Unemployment change in Germany dropped to -15 thousand below the expected 5 thousand although the unemployment rate remained unchanged at 5.5%. Preliminary CPI data in France declined in January to 0.4% vs the 0.5% expected [MoM]. Looking ahead, employment data from New Zealand will be due late today. Further up the pair may reclaim 1.6900 and 1.7000 psychological resistances.
European equities edged lower on Tuesday in the European trading session. The UK100 fell -0.69% trading below 7750 with 7650 in focus. CAC40 in France lost -0.57% with 7000 and 6950 as targets on the downside. The German40 was down -0.71% moving between 1500 resistance and 14900 low. A move lower may set targets at 14700.
US stock futures dipped on a stronger dollar as the central banks’ decision looms. The US100 futures were down -0.87% now trading below 12000 with key figures seen at 11750 and 11500. The US500 futures fell -0.67%, a continuation from yesterday’s fall from 4075, and is selling below 4000. The slide may give 3930 and 3900 in the near term. US30 futures slumped by -0.47% sliding towards 33000 psychological resistance.
XAUUSD fell -0.95% resuming its 4-day slide towards $1900 support. The dollar strength on the day weighed on the precious metal. Next on the slide are $1880 and $1850.
