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JPY Down on Riskon, but USD not EUR Benefits

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Note  The table above is updated before publication with the latest consensus forecasts. However, the text charts are prepared ahead of time. Therefore there can be discrepancies between the forecasts given in the table above and in the text charts. 

Rates as of 0500 GMT

Market Recap

With three vaccines now on the horizon, including one more suitable for the developing world, the riskon mood continued. Stocks were generally higher and the commodity currencies all gained, while the safehaven JPY and CHF fell. 

Curiously though it was not EUR but rather USD that benefited from the improved mood this time, contrary to the recent performance of USD as a safehaven currency. Some of that may have been because of the US outperformance on the preliminary purchasing managers indices PMIs yesterday. The US PMIs for November were both much better than expected they had both been expected to fall but in the event were both up, quite sharply in the case of manufacturing. Especially the employment component of the servicesector PMI jumped 5.5pts to 58.6, a record high. Thats a good sign for Novembers payroll figure. 

By contrast, the Eurozone PMIs were mixed manufacturing was a bit better than expected, but services were significantly worse. Nowadays its the servicesector PMI that everyones watching, as services are more directly affected by the pandemic than manufacturing is.

There may also have been some technical factors behind the move. EURUSD broke above 1.19 for the…

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