Canada’s GDP Contracted First Time in Six Months - 1.2.2012

US Dollar The dollar strengthened against the major counterparts, except the Japanese yen, in Asian trading hours today as investors seem to be disappointed with the Greek debt talks progress with its private creditors. The dollar index rose to 79.57 from a 7-week low 78.74. Nevertheless the US currency fell to another lowest level since October 31 against the Japanese yen, touching this morning the level 76.11. Today the data may show that manufacturing in the US expanded in January more than in the previous month. According to preliminary estimations, the Institute for Supply Management’s factory index may increase to 54.5 from 53.1 in December. Euro The euro is weaker against the greenback and the yen as Greece is still failing to reach an agreement with private creditors. However the nation’s finance minister Evangelos Venizelos reiterated yesterday that they are “one step from closing” a debt-swap deal, and added that the government must complete talks with the IMF and the EU about a new financial aid package by February 5. The euro fell to a 5-day low versus the dollar in Asian trading hours (1.3025) before Portugal’s 105-day and 168-day bill auction today. Australian Dollar The Australian dollar looks more stable against the US counterpart than the single currency, as the aussie is trading close to a 3-month high 1.0690. Despite stronger-than-expected drop in house prices, the currency was supported today after the data showed that China’s (the South Pacific nation’s biggest trading partner) manufacturing indexes increased in January to 50.5 from 50.3 in December. Pair AUD/USD was close to 1.0600 in Asian trading hours. Canadian Dollar The Canadian dollar is also almost flat against the greenback. Pair USD/CAD failed to consolidate below parity yesterday after Canada’s gross domestic product unexpectedly declined in November by 0.1%, while the annualized growth pace fell to 2.0% from 2.7%. Today the pair traded in a narrow range between 1.0015 and 1.0050.