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:
- US Services PMI November Preview: Are initial claims the sign markets think?
- US Initial Jobless Claims Preview: What was old is new again
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
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.