Currency-market volatility spiked higher in early Asia on Thursday with the yen surging against all majors.

Currency-market volatility spiked higher in early Asia on Thursday with the yen surging against all majors and USD/JPY briefly plunged to the 105.00 level before recovering.

Apple’s earnings warning unsettled equities with sharp losses in US futures, although Asian markets did demonstrate resilience.

The dollar posted significant net gains against European currencies in choppy trading while AUD/USD briefly hit 9-year lows before recovering.

Sterling lost ground despite a stronger than expected manufacturing PMI release.

Crude initially rallied sharply in choppy conditions despite US dollar strength before fading again as demand fears persisted.

Gold advanced to fresh 6-month highs as fragile risk conditions boosted defensive support.

The UK PMI manufacturing index strengthened to a six-month high of 54.2 for December from a revised 53.6 previously and was above consensus expectations. New orders strengthened significantly and there was evidence of strong stock building during the month as companies took precautions ahead of potential Brexit-related disruptions. The data failed to provide significant Sterling support, especially with fears that inventory building would not provide sustained support.

Political uncertainty also returned as a feature with parliament set to return from recess next week. Media reports suggested that Prime Minister May was looking for further concessions from the EU.

GBP/USD declined to below 1.2600 while GBP/EUR settled around 1.1020. The BCC reported weak fourth-quarter services-sector growth, although global currency moves dominated with GBP/EUR fell to 1.1000 while GBP/USD briefly declined to 20-month lows below 1.2450 on the global flash crash before regaining 1.2550 in early Europe.

Economic Calendar

Expected Previous
08:15 CHF Retail Sales (Y/Y)(NOV, 2018) - 0.80%
08:30 CHF SVME PMI(DEC, 2018) - 57.7
09:30 GBP PMI Construction(DEC, 2018) - 53.4
13:15 USD ADP Employment Change(DEC, 2018) 175K 179K
13:30 USD Initial Jobless Claims(DEC 08, 2018) - 216K
13:30 USD Continuing Jobless Claims(DEC 08, 2018) - 1.701K
15:00 US Manufacturing ISM(M/M)(DEC, 2018) 58.4 59.3

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.