News

America’s Roundup: Dollar gains on new COVID-19 strain, Wall Street ends mixed, Gold falls, Oil drops as new coronavirus variant revives demand fears-December 23rd,2020

Market Roundup

•U.S. housing, consumer confidence data disappoints

•US Congress passes U.S. stimulus bill, awaits Trump approval

•US Core PCE Prices (Q3) 3.40%, 3.50% forecast,-0.80% previous

•US PCE Prices (Q3) 3.7%,3.7%,-1.6% previous

•US Real Consumer Spending (Q3) 41.0%,40.6% previous

•US GDP Sales (Q3) 25.9%,25.6% forecast ,25.5% previous

•US GDP Price Index (QoQ) (Q3) 3.7%, 3.7% forecast , -2.1% previous

•US GDP (QoQ) (Q3) 33.4% ,33.1% forecast,-31.4% previous

•US Corporate Profits (QoQ) (Q3) 27.0%,27.5% forecast,-10.7% previous

•US Redbook (MoM) -0.9%,-2.2% previous

•US Redbook (YoY) 6.5%, 2.5% previous

•US Dec CB Consumer Confidence 88.6 ,97.0 forecast, 96.1 previous

•US Nov Existing Home Sales (MoM) -2.5%, -1.0% forecast, 4.3% previous

•US Nov Existing Home Sales 6.69M, 6.70M forecast, 6.85M previous

Looking Ahead – Economic Data (GMT)

•06:00 Austrralia Nov Private Sector Credit (MoM) 0.0% previous

•06:00 Austrralia Nov Housing Credit 0.3% previous

Looking Ahead – Economic events and other releases (GMT)

•23:50 Japan Monetary Policy Meeting Minutes

Currency Summaries

EUR/USD: The euro declined against the dollar on Tuesday as the closing of key trade routes, due to the new strain, weighed on the euro. New coronavirus strain in Britain that prompted a lockdown and caused several countries to shut their borders to Britain, clouded the global economic recovery outlook and pushed European currencies lower. The euro fell 0.2% against the dollar to $1.2181. Immediate resistance can be seen at 1.2271 (23.6% fib), an upside break can trigger rise towards 1.2300 (Psychological level).On the downside, immediate support is seen at 1.2233 (5DMA), a break below could take the pair towards 1.2138 (38.2% fib).

GBP/USD: Sterling fell against dollar on Tuesday as Britain remained stuck in COVID-19 isolation due to a new coronavirus strain, although hopes of progress in Brexit talks helped to take some pressure off. EU sources added that the bloc was now willing to accept a reduction in the value of its catch in UK waters of up to 25% over a period of time from 2021.The pound was 0.5% lower against the dollar at $1.3385 by 1800 GMT, after weakening by as much as 2.5% to $1.3190, a 10-day low, on Monday. Immediate resistance can be seen at 1.3414 (38.2%fib), an upside break can trigger rise towards 1.3504(23.6%fib).On the downside, immediate support is seen at 1.3337 (50%fib), a break below could take the pair towards 1.3254 (61.8 %fib).

USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Tuesday along with lower oil prices, as a new strain of the coronavirus capped optimism of a vaccine-led recovery in the global economy. Oil, one of Canada’s major exports, added to losses from the previous session as a new coronavirus strain in the United Kingdom revived concerns over demand recovery. U.S. crude prices were down 1.4% at $47.32 a barrel. The Canadian dollar was trading 0.2% lower at 1.2880 to the greenback. The currency traded in a range of 1.2843 to 1.2888, after hitting a near three-week low on Monday at 1.2955.Immediate resistance can be seen at 1.2954 (38.2%fib), an upside break can trigger rise towards 1.3015 (23.6%fib).On the downside, immediate support is seen at 1.2900 (50%fib), a break below could take the pair towards 1.2846 (61.8 %fib).

USD/JPY: The dollar strengthened against the Japanese yen on Tuesday as greenback was supported by U.S. economic data, and weakening rivals, which were weighed down by Brexit uncertainty. Tuesday’s data was weaker than expected, with U.S. existing home sales falling more than expected in November and the consumer confidence index lower than forecast. The weak U.S reports reinforced the dollar’s rally. The dollar index rose 0.6% to 90.675, as the euro fell 0.7% to $1.2156.The dollar rose 0.4% versus the yen to 103.70 yen. Strong resistance can be seen at 103.67 (50%fib), an upside break can trigger rise towards 103.86(61.8%fib).On the downside, immediate support is seen at 103.47 (38.2%fib), a break below could take the pair towards 103.22(23.6%fib).

Equities Recap

European shares posted their best day in six weeks on Tuesday, rebounding from a sharp sell-off as optimism around Brexit and U.S. stimulus helped to allay worries of a further hit to the global economy from a new coronavirus variant in Britain.

UK’s benchmark FTSE 100 closed up by 0.57 percent, Germany’s Dax ended up by 0.05 percent, France’s CAC finished the day up by 1.35 percent.

US Stocks ended mixed on Tuesday as lingering concerns over a new variant of COVID-19 in the United Kingdom weighed on US equities.

Dow Jones closed down by 0.67% percent, S&P 500 closed down by 0.21% percent, Nasdaq settled up by 0.51% percent.

Treasuries Recap

U.S. Treasury yields fell on Tuesday as investors weighed the likelihood of new lockdowns stemming from a more infectious variant of the coronavirus in the United Kingdom against the impact of U.S. fiscal stimulus.

Benchmark 10-year yields fell to 1-1/2 week lows early on Monday as countries shut off travel ties with the UK. The yields have since fluctuated as investors focus on whether the new variant will be resistant to vaccines.

Commodities Recap

Gold prices fell on Tuesday as the dollar strengthened on growing worries about a mutant coronavirus strain in the UK, while market response to a long-awaited U.S. economic stimulus package limited bullion’s losses.

Spot gold edged 0.2% lower to $1,872.47 per ounce by 1215 GMT, U.S. gold futures fell 0.3% to $1,877.30.

Oil dropped towards $50 a barrel on Tuesday, adding to losses from the previous session, as a mutant variant of the coronavirus in Britain revived concerns over demand recovery.

Brent crude was down 60 cents, or 1.2%, at $50.32 a barrel by 11:58 a.m. EST (1558 GMT), while U.S. West Texas Intermediate (WTI) crude fell 72 cents, or 1.5%, to $47.25


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