The headline news today was Iran’s missile attack of two bases in Iraq which house foreign, including US, military personnel. There have so far been no reports of casualties but it’s another step up in the escalation in tensions between the US and Iran.
The Dollar remains surprisingly stable, having traded in a 0.4%-wide range in the past nine sessions. The Dollar has failed to benefit from strong macro data releases in the past 24 hours. The US ISM non-manufacturing PMI rose from 53.9 in November to a stronger-than-expected in 55.0 December – the high since August. Moreover, according to the ADP, the non-farm private sector created 202,000 jobs in December – an 8-month high. So while the US manufacturing sector has struggled for over a year, the services sector has held much better and the labour market remains very robust.
Price action was more pronounced in other major currencies. The Euro lost another 0.2% today, taking its losses to 0.5% for the past two sessions, with the EUR/USD cross down to 1.11. The Australian and Kiwi Dollars, which had been on a downward slide since end-2019, are both up 0.3% today in trade-weighted terms.
