What to keep in mind on Wednesday, January 3:
The US dollar was the big winner on Tuesday, with strong appreciation against its main rivals. Investors returned to the dollar following signs of tepid global growth in late 2024. S&P Global released December manufacturing PMIs for several major economies, all of which indicated that economic contraction persists.
The S&P Global EU Index was reported at 44.4, slightly better than the previous 44.2. In the UK, manufacturing output stood at 46.2, worsening from the previous 46.4 and beating expectations. The US PMI stood at 47.9, down from 48.2 previously, while the Canadian index contracted to 45.4. The poor growth figures made market operators rethink aggressive bets on upcoming rate cuts among the most developed economies.
The EUR/USD pair fell to 1.0940 and stabilized a handful of points above the level. GBP/USD is trading near 1.2600, while commodity currencies are among the biggest losers, with AUD/USD hovering around 0.6760 and USD/CAD around 1.3320.
Finally, the USD/JPY pair is trading around 142.00, while Gold did not register major changes and ended the day with moderate losses around $2,060 per troy ounce.
Government bonds fell, with yields hitting their highest level since mid-December. Wall Street turned lower and all three major indices posted daily losses.
On Wednesday, some relevant figures will be published in the United States, such as the ISM manufacturing PMI for December, the JOLTS job openings for November and the minutes of the Federal Open Market Committee (FOMC). The latter could be relevant after Chairman Jerome Powell mentioned rate cuts following the Federal Reserve's (Fed) latest monetary policy decision. No data will be released during the Asian session.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
