FX News Today
The U.S. markets will be closing early today, ahead of Christmas Day and trading should be limited. The U.S. stock markets have enjoyed 3 straight day’s of gains in the usually end of year rally. Stock markets have been partly supported by the nearly 4% gains seen in the price of U.S. Oil, with Crude prices clearing to the upside of $37.00, following news that EIA crude inventories plunged 5.88 mln bbls compared to a Reuters forecast of a 1.1 mln build (6.98 mln bbl difference). The only U.S. data report today is weekly jobless claims, expected to edge up 1k to 272k.
U.S. economic reports revealed slightly encouraging personal income data and an upside durable orders surprise.
European markets will be quiet today. The German market has already closed for Christmas, while the U.K. market will be closed on Monday for Boxing Day. The only data on the agenda is from the U.K. with BBA mortgage approvals.
The GBP has been preforming today, rising against the USD. The pound’s run higher following a near two-week period of notable under-performance as markets scaled back BoE tightening expectations. Cable has been posting gains with markets shrugging off an unexpected downward revision lower in final UK Q3 GDP data for the last two trading sessions in what continues to be a technical bounce.
The EURUSD dipped under 1.0950, which roughly marks the 50% retracement of the rally from last week’s 1.0800 low. The USDJPY broke to the downside of the 120.60 support.
Main Macro Events Today
• JPY Monetary Policy Meeting Minutes: Reveled slow wage and capital expenditure growth are areas of concern but were optimistic that companies will start to boost spending once emerging economies improved. The BOJ kept policy steady since October, betting that companies will use their profits to lift wages and capital expenditure and help kick off a positive economic cycle. The Nov. 18-19 rate review, the BOJ board discussed why companies were slow to respond. Companies probably felt their current record profits were due to temporary factors like the weak yen and low energy costs, and weren’t convinced that earnings would remain strong in the future, the minutes showed. At the time of writing the JPY is sharply stronger vs the USD with the USDJPY pair down around 50 pips for the session.
• EUR German Bank Holiday:
• USD Unemployment Claims: U.S. initial jobless claims are expected to be 272k (median 270k) in the week-ended December 19. Continuing claims are expected to fall to 2,232k for the week-ended December 12. Forecast risk: upward, as holiday hiring could hold down claims. Market risk: downward, as weaker than expected data could slow the path of rate hikes.
• NZD Bank Holiday:
• AUD Bank Holiday:
Janne Muta
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
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