• Euro manufacturing accelerated
  • China in turmoil
  • Equities shocked to start year
  • Politics a focus

To start the year on a bright note Eurozone manufacturing accelerated at the fastest pace in almost two years.  All nations, even Greece, experienced expansion helping the Euro to gain some ground against other currencies today.  The U.K. on the other hand had an unexpected drop in their manufacturing numbers to three month lows.  This reversed gains the pound had earlier this morning on news that a rate hike could be expected in May.

Leading the world today in a turbulent equities market is China who put a freeze on trading in the stock market after a 7% drop in value.  This is in conjunction with poor manufacturing data which has hurt trading partners such as Australia significantly with the Australian dollar down more than 1% this morning on the news.  US stocks also look set for a large loss to start the year in part due to uncertainty over China which has set the tone for trading today.  One currency that has benefited from this is the Japanese Yen which is up over 1% at the time of writing as investors flock to this “safe haven” alternative.

This year looks to have politics be its main focus with several key events happening that have potential to shake the markets up.  The main event is the US Presidential Election in November but a few other things set to happen this year are the UK’s vote on EU membership, Spain still trying to form a government and Saudi Arabia severing diplomatic ties with Iran.

EURUSD: Euro is trading higher this morning on good manufacturing data.

GBPUSD: The pound is trading slightly up but close to flat on possible rate hike later this year and poor manufacturing data.

AUDUSD: Aussie dollar down dramatically this morning as Chinese markets go haywire.

USDCAD: Canadian dollar has weakened this morning in choppy trading as markets figure themselves out, especially the Chinese market.