Here is what you need to know on Monday, December 7:
The greenback corrected some of its extreme oversold conditions after reaching fresh year lows against most major rivals but remains the weakest currency across the FX board.
The EUR/USD pair is firmly anchored above 1.21, while USD/CAD trades sub-1.2800. USD/JPY and AUD/USD saw little action with the latter reaching a two-year high.
The GBP/USD pair traded as high as 1.3539 but closed the day around 1.3430 amid contradictory Brexit headlines. Hopes boosted the pair early on Friday, but intensive Brexit trade talks have bare no fruit. EU´s Brexit Negotiator Michel Barnier tweeted that, after a week of negotiations in London, both sides were unable to reach an agreement, with persistent, significant differences on the issues of a level playing field, governance and fisheries.
On Saturday, EU’s Commission leader Ursula von der Leyen said, “I had a phone call with Boris Johnson on the EU-UK negotiations. Differences remain. No agreement feasible if these are not resolved. Chief negotiators will reconvene tomorrow. We will speak again on Monday.” GBP/USD could gap lower at the weekly opening.
Gold recovered last week, closing it at $1,838 a troy ounce, below the base of its previous range. Mixed US employment data fueled hopes for fiscal stimulus, providing support to the bright metal.
US Treasury yields reached a three-week high, with the yield on the benchmark 10-year note reaching 0.97%.
Equities advanced on Friday amid hopes related to coronavirus vaccines. Russia has started immunization on Saturday, and the UK plans to start this week. Several other countries are on their way to start preventive vaccination before year-end.
Bitcoin technicals suggest an imminent correction before the next leg up
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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.
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