Aussie down as global markets drift
Global markets drifted lower on Monday with investors on edge ahead of the long-delayed November US jobs report due at 12:30am tonight.
US Dow Jones was down 0.1%, while the tech-focused Nasdaq dropped 0.6%.
In FX markets, the AUD/USD fell 0.2%. The Aussie was lower in other markets, with the most significant losses versus the British pound, euro, and Japanese yen.
The NZD/USD was even more pressured, down 0.4%, after new Reserve Bank of New Zealand Governor Anna Breman said monetary conditions were tighter than forecast—leaving the door open for further rate cuts.
In Asia, the USD was weaker, with USD/JPY falling 0.3%.
The USD/SGD fell 0.2% as it traded to the lowest level since 2 October.
The Chinese yuan strengthened further on Monday despite softer results from key monthly indicators, including industrial production, retail sales, and fixed asset investment.
Annual retail sales growth slowed sharply to 1.3% in November, down from 2.9% in October, while industrial production eased from 4.9% to 4.8% over the same period.
Euphoric euro meets downbeat dollar
The US dollar has started the new week still on the defensive, but the euro’s rally is running hot. The macro and policy backdrop remains complex as a heavy calendar of risk events kicks off. Yesterday saw October’s Eurozone industrial production rise 0.8%, lifting annual growth to 2.0% and supporting the common currency versus the beleaguered US dollar. The $1.18 mark is eyed to the upside this week.
After years of pressure from high energy costs, trade frictions, a stronger euro, and rising Chinese competition, lower oil and gas prices and leaner inventories are finally supporting a cyclical Eurozone recovery. Structural headwinds remain, but the ECB is likely to frame this rebound as evidence that no further rate cuts are needed—a euro-positive story.
Today’s PMI data will be pivotal. In the Eurozone, the services PMI is expected at 53.3, while manufacturing is seen edging up to 49.9, just shy of growth territory. Stronger-than-expected prints would reinforce the view that the ECB’s next move could be a hike, adding fuel to the euro’s advance. But the speed of the rally has already pushed EUR/USD close to technically stretched territory, with the RSI hovering just below 70. That raises the risk of consolidation or a short-lived pullback, even if fundamentals remain supportive.
Away from the EUR/USD pair, AUD/EUR has turned sharply lower from the six-month highs seen last week, while NZD/EUR has similarly reversed from six-week highs. EUR/SGD hit a three-year high.
US jobs due
The US November non-farm employment report, delayed by the government shutdown, will be tonight’s major release with forecasts for a 50K gain and unemployment edging up to 4.5%.
Disappointing figures would ramp up expectations for Fed cuts in 2026, weighing on yields and the dollar; a beat would pare those bets, lift the dollar, and cap the euro’s rally.
With the Fed chair and key speakers all pointing to the weaker jobs market as a reason to cut, tonight’s NFPs could have a seismic effect if we see a significant miss in either direction.
Alongside payrolls, US retail sales and a slate of Fed speakers will provide further tests of demand and policy direction.
Kiwi leads losses after Breman comments
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 15 – 20 December
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