Currencies seen around the world as “safe haven” options were much in demand as trading for the day got underway on Tuesday.
The US dollar, which is one of the two main perceived “safe havens”, managed to hold firm. The dollar index, which assesses how well the greenback is performing in relation to six other currencies from around the world, held firm at 96.33.
Meanwhile, the Japanese yen, which is also considered to be safe, managed to secure rates of 109.64 when exchanged for the US dollar – another steady performance.
The developments came largely as a consequence of worries over global economic growth. The International Monetary Fund (IMF) released predictions overnight which claimed that a slowdown in the Eurozone bloc and in the major Asian economic powerhouse China could spell lower growth this year and next.
Elsewhere, the Australian dollar dropped against the US dollar to $0.7157. The Australian dollar is often perceived as at risk when problems related to China arise given the deep links between the two Asia-Pacific economies.
The rest of the week holds plenty to keep forex traders’ attention fixed.
Today (Tuesday) sees data on Canadian manufacturing shipments for November out at 1.30pm GMT. This is expected to show a month on month change from -0.1% to -0.9%.
Existing home sales in the US for December are expected at 3pm GMT. Month on month, the change here is predicted to go from 5,320,000 to 5,250,000.
New Zealand consumer price index data for the fourth quarter of last year is expected at 10.45pm GMT. Quarter on quarter, this is expected to show a dip from 0.9% to 0.0%.
Looking ahead to tomorrow, the Bank of Japan will kick off the day’s proceedings with its interest rate decision at 2am GMT. This is forecast to remain steady at -0.1%.
Later in the day, Canadian retail sales information for November will be released, which is expected at 1.30pm GMT. This is forecast to show a drop month on month from 0.3% to -0.6%.
Preliminary European consumer confidence data for the month of January is expected at 3pm GMT. This is expected to show a change from -6.2 to -6.5.
Thursday, has lots of Australian data scheduled into the calendar. Employment change information for the month of December is expected at 12.30am GMT, and it is forecast to show a change from 37,000 to 20,000.
November’s participation rate is expected to move from 65.7% to 65.6%.
Preliminary Markit manufacturing PMI information for January is due out of Germany at 8.30am GMT, while Italy’s non-EU trade balance for December will follow at 9am.
The European Central Bank’s interest rate decision at 12.45pm GMT is expected to remain steady at 0%, while its deposit rate decision is also expected to hold on – this time at -0.4%.
The day will be rounded off by an announcement on the Tokyo CPI (excluding fresh food) for the month of January, which is expected at 11.30pm GMT. This is predicted to remain at 0.9%.