Forex Today: Gold hit by fading US stimulus hopes, dollar declines on vaccine progress, Brexit eyed
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The US dollar remains under pressure despite drops a mixed market mood. The fading chances of a US stimulus and Brexit deals are somewhat weighing on markets, with gold retreating. On the other hand, commodity currencies extend their gains, led by the jump in oil prices. US consumer sentiment is eyed.
US stimulus: Senate Majority Leader Mitch McConnel gave a cold response to a new proposal by Treasury Secretary Steven Mnuchin and a bipartisan bill, diminishing the chances of a deal. The move comes despite a leap in jobless claims to 853,000. Talks in Washington continue ahead of the holidays.
The University of Michigan's preliminary Consumer Sentiment Index for December is set to show figures similar to November's 76.9 score, which was below previous months. The survey comes as the US reported another day with over 3,000 covid deaths, and as hospitalizations hit new records.
See: US Michigan Consumer Sentiment December Preview: For once consumer attitudes may not matter
Vaccine 1: A advisory panel in the US Food and Drugs Administration recommends approving the Pfizer/BioNTech coronavirus immunization, paving the way for authorization and usage. The expected greenlight follows seals of approval from Canada and the UK.
Vaccine 2:Sanofi and GSK have announced they will delay their vaccine candidate rollout as they strive to improve immune response in the elderly.
Brexit: UK Prime Minister Boris Johnson said that a no-deal is now a "strong possibility" as negotiations continue ahead of the Sunday deadline. The EU publishes contingency plans in case the transition period expires at year-end without an accord.
In the UK, London, Kent and Essex have hit high virus incidence rates, raising expectations that the capital will enter Tier 3 restrictions next week.
German COVID-19 cases and deaths have hit a new record for this wave. Europe's largest country is set to tighten restrictions ahead of Christmas. France is modifying some of its lockdown rules but maintains the nationwide shuttering as infections stopped dropping.
The European Central Bank added €500 billion to its bond-buying scheme, which will run through March 2022. ECB President Christine Lagarde said that if conditions improve, the bank could refrain from using the full envelope.
ECB Analysis: Lagarde shows her love for markets and the euro, more EUR/USD gains likely
The language on the exchange rate remained unchanged, allowing the euro to rise. EU leaders approved the bloc's multi-year budget after resolving a dispute with Hungary and Poland.
WTI Crude Oil is consolidating its gains near $47. Commodity currencies were on a roll on Thursday and have been extending their gains on Friday. AUD/USD is firmly above 0.75 and USD/CAD nears 1.27.
Cryptocurrencies are on the back foot, with Bitcoin changing hands below $18,000.
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