Yen struggles today even as risk aversion set the tone across Asian markets. Nikkei extended its retreat after briefly breaching 40k psychological level last week, as the rally proved unsustainable for investors. Adding to Yen's woes, December PMI Services data highlighted only marginal growth, failing to provide a meaningful lift to the broader economy. Meanwhile, BoJ Governor Kazuo Ueda reiterated a cautious stance, offering no concrete hints about a rate hike this month. Last week’s recovery in Yen may turn out to be fleeting. Elsewhere, commodity currencies emerge as the strongest performers today so far, extending their resilience from last week. However, their gains lack significant momentum, reflecting market caution. Meanwhile, Euro and Sterling are trading in a mixed manner, stabilizing after last week’s sharp losses. Dollar, Yen, and Swiss Franc are lagging behind, with Yen as the weakest performer. Markets are bracing for a critical week ahead, with a slew of high-impact economic data on the docket. US Non-Farm payrolls and ISM services data will likely set the tone for the Dollar, particularly as markets remain firmly priced for Fed to pause its easing cycle this month. Inflation data from the Eurozone, Switzerland, and Australia will also attract attention, shaping the narrative around ECB, SNB, and RBA policies. Additionally, Canadian employment data will test the resilience of Loonie, which outperformed other commodity currencies last month but has recently shown signs of waning momentum.... |
