The U.S. Dollar posted strong gains on Wednesday as price action in the greenback sent most of its peers to close lower on the day. Gold prices tried to inch higher but failed to keep the intraday gains. WTI crude oil prices, on the other hand, managed to close bullish.
Higher yen and gold prices reflected the risk-off sentiment in the market while the Kiwi Dollar, the AUD, GBP, and the Euro posted strong declines on the day.
On the economic front, manufacturing PMI from the Eurozone showed that activity in the sector was unchanged at 51.5 compared to the month before. This was however in line with the median estimates.
In the UK, manufacturing activity rose to 54.2, marking a slight advance from the estimates of 52.5 and up from a revised reading of 53.6 in November. Markit’s manufacturing PMI for the U.S. showed a modest decline to 53.8 which was below estimates of 53.9
Looking ahead, the economic data from the Eurozone is relatively quiet. In the UK, the construction PMI data is due to be released today. Forecasts point to a slowdown in the UK’s construction activity with the index expected to ease to 52.9. This is weaker compared to 53.4 that was registered the month before.
The NY trading session will see the release of the U.S. ADP private payrolls report for December. Economists forecast that private payrolls rose slightly by 180k in December, up from 179k in November. The weekly unemployment claims follow the ADP report.
The main event for the day will be the Institute of Supply Management’s manufacturing PMI report. Manufacturing activity is expected to ease to 58.2 in December, down from 59.3 previously. The ISM prices paid is also likely to ease from 60.7 to 57.9.
