Forex Today: Kiwi rebounds on China PMI, German CPI & US ISM eyed

Holiday-mode trading extended into Asia this Tuesday as the Japanese and New Zealand markets were still closed in observance of extended New Year’s holiday. Although fresh news out of China dominated markets almost throughout the Asian session. The PBOC added more currencies to their FX basket, while overnight CNH Hibor jumped to the highest level since Sept 2016. However, solid Chinese manufacturing PMI data published by Caixin stole the limelight in Asia.

We have a busy European calendar ahead, as Europe returns in ful-fledged and looks forward to the German CPI and employment data, followed by the UK manufacturing PMI report. Heading into the NA session, there is a slew of risk events to be reported in the form of the NZ GDT price index, US ISM manufacturing PMI and Markit final manufacturing PMI release.

Main topics in Asia

China expands currency basket to 24

The People’s Bank of China (PBOC) has expanded the currency basket against which it measures the Yuan to 24 from 13.

China's December Caixin Manufacturing PMI way above expectations

China’s December Caixin Manufacturing PMI came at 51.9 vs 50.9 last, much stronger than expectations of a 50.9 reading.

Caixin's Hu Shuli: Calls for a more flexible GDP target for 2017

Livesquawk reports comments from Caixin's Hu Shuli, posted in an editorial issue of the Caxin Weekly published a day before.

Overnight CNH HIBOR rate jumps to highest since September 2016

The overnight CNH (offshore) Hong Kong Inter Bank Offered Rate (HIBOR) rose to 17.76%, the highest since September 2016.

FOMC voters change for 2017

Stepping into 2017, let us look at the changes in the Federal Reserve Federal Open Market Committee, with the regional Fed Presidents rotating each year.

Key focus for the day ahead

EUR/USD re-attempts 1.0500 ahead of German data

EUR/USD is seen reversing a part of yesterday’s declines and remains poised to regain 1.05 handle amid broad based US dollar retreat, while the shared currency appears to resume last week’s winning streak.

GBP/USD bounces-back to 1.2300, UK PMI in focus

Markets ignored broad based US dollar strength, as all eyes now remain focused on the upcoming UK manufacturing PMI and US ISM manufacturing reports lined up for release later today for near-term direction on the spot.

Emerging markets picture is mixed - Rabobank

Analysts at Rabobank suggest that the emerging markets picture is mixed as some of the larger economies, such as Brazil and Russia, are emerging from a long and deep recession while a slight positive growth is expected in 2017, for the first time in several years.