Forex Today: Dollar remains on the back foot as two hopes clash with two concerns, data eyed

Yohay Elam FXStreet

Here is what you need to know on Thursday, December 3:

The US dollar remains on the back foot amid a mix of positive and adverse developments. US coronavirus cases and worsening relations with China weigh on sentiment, while stimulus and vaccine hope boost sentiment. Brexit and OPEC+ talks and NFP hints are eyed.

US fiscal stimulus: House Democrats endorsed the trimmed-down $908 billion relief bipartisan program presented by several senators. The growing chances of a deal have been supporting markets. President-elect Joe Biden aims to provide further support once he takes office in January.

Gold has been consolidating its gains, trading at around $1,832. Hopes for a deal in Washington have been underpinning the precious metal.

Sino-American relations: Congress has passed a bill that intensifies scrutiny of Chinese companies and outgoing President Donald Trump is set to sign it. This bipartisan effort is another downer for stocks.

Daily US COVID-19 cases have hit a new high near 200,000, daily deaths are at around 2,700, close to the spring peak, and hospitalizations surpassed the 100,000 level. The grim figures, after a Thanksgiving-related hiatus, have cooled market enthusiasm.

The US economic calendar features weekly Unemployment Claims, which are set to edge lower after two consecutive rises. The ISM Services Purchasing Managers' Index is forecast to decline, but continue pointing to growth. The PMI's employment component serves as a hint toward Friday's Nonfarm Payrolls.

See:

German Chancellor Angela Merkel announced that covid-related restrictions will be extended until early January as Europe's largest economy is struggling the curb the spread of the disease.

EUR/USD is shrugging off news from Germany and holding onto gains above 1.21. Markit's final Services Purchasing Managers' Indexes and eurozone Retail Sales are due out during the morning.

See EUR/USD Forecast: Three reasons for the massive breakout and big levels to watch

Covid vaccine: The UK continues preparing for injecting the first Pfizer/BioNTech vaccines on December 8. European and US regulators are set to give their green light later this month and Moderna's immunization is also undergoing an approval process.

Brexit: France has warned it may veto a trade deal if it is dissatisfied with the outcome. Paris suspects that Chief EU Negotiator Michel Barnier, a Frenchman, would give too much ground to London. Intense talks continue with fisheries, governance and a level playing field being the points of contention.

The OPEC+ meeting is resuming after delegates were unable to agree on extending oil production cuts into 2021. WTI Crude is changing hands at around $45, stable.

Cryptocurrencies have somewhat calmed, with Bitcoin consolidating around $19,000.

More US Manufacturing Slows in November: New business remains strong

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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