Talking Points:

US Dollar Corrected Higher Overnight After Falling Most in Two Weeks
Aussie, NZ Dollars Sink as China Warns About Coal Industry Credit Risks
Comments from ECB’s Draghi, BOE’s Carney in Focus into the Weekend

A lull in high-profile event risk put major currencies into consolidation mode in overnight trade. The US Dollar corrected cautiously higher as markets digested the aggressive selloff played out over the preceding 24 hours. The benchmark currency slumped 0.4 percent against its leading counterparts yesterday, marking the largest daily drop in two weeks.

The Australian and New Zealand Dollar underperformed after China issued a warning about credit risks in the coal industry. The East Asian giant is Australia and New Zealand’s largest trading partner and instability there threatens the outlook for export demand. Needless to say, this bodes ill for two countries’ economic growth profile and monetary policy expectations.

The economic data docket is relatively quiet through the end of the trading week, putting the spotlight on speeches from Bank of England Governor Mark Carney and ECB President Mario Draghi at the World Economic Forum in Davos. Investors will comb through Carney’s remarks for clues about a possible revision to the BOE’s forward-guidance framework after the UK jobless rate dropped to within a hair of the 7.0 percent target level. Meanwhile, Draghi’s speech will be evaluated for rhetoric pointing to Eurozone deflation risks and possible policy steps the ECB could take to counter them.

New to FX? START HERE!

Asia Session

GMT

CCY

EVENT

ACT

EXP

2:00

NZD

Credit Card Spending (MoM) (DEC)

-1.2%

–

3.5%

2:00

NZD

Credit Card Spending (YoY) (DEC)

4.7%

–

6.9%

European Session

GMT

CCY

EVENT

EXP/ACT

IMPACT