EU session review: Australian, New Zealand Dollars drop on speculation China will cool growth

Data released
07:00     Germany     PPI (December)    0.7%    0.5%    0.2%
07:00     Germany     PPI (December) Y/Y    5.3%    5.1%    4.4%
11:00     UK     CBI industrial order books balance (January)  -16%    -3%

The Australian and New Zealand dollars declined against most of their major peers as speculation that China will take more measures to cool growth dented demand for higher-yielding currencies.
The U.S. currency and the yen strengthened as equity losses boosted demand for a refuge. Data showed China’s economic growth accelerated, adding to pressure for monetary tightening.
The dollar pared gains against the common currency before data that economists predict will show U.S. continuing jobless claims increased and home-sales growth slowed.
China’s economic growth quickened to an annual rate of 9.8% in the fourth quarter, up from 9.6% in the prior three months, the statistics bureau said. Consumer prices rose 4.6% in December from a year earlier, compared with 5.1% the previous month.
The People’s Bank of China will increase the key one-year lending rate to 6.81% from 5.81% this year and let the yuan strengthen about 6% against the dollar, Nomura Holdings Inc. forecast this week.
New Zealand’s dollar retreated from near the strongest this year. The government said consumer prices rose 2.3% in the fourth quarter from the previous three months, when they advanced 1.1% . Economists forecast 2.4% growth.
The euro gained against the pound and the yen as statistics showed German producer prices climbed at the fastest pace in seven months.

EUR/USD fell to $1.3417 after it failed to break above $1.3500 at first attempt. Later rate printed highs on Y1.3522.

GBP/USD rose from $1.5905 to $1.6010 before set stable within the $1.5970/$1.6000 range.

USD/JPY held within the narrow Y82.00/Y82.30 range.

US data starts at 1330GMT, when initial jobless claims are expected to fall 25,000 to 420,000 in the January 15 employment survey week after rising 35,000 in the previous week. Claims were at a level of 420,000 in the December 18 employment survey week.