The US$ is flat, oil extends gains, while equity markets & US yields firm ahead of today’s busy US economic docket. There are a number of key economic data releases today including US Jobless claims, Nondefense Capital Goods Orders, Personal Consumption Expenditures, Personal Income, Michigan Consumer Sentiment, New Home sales and Durable Goods Orders all of which have the potential to impact currency market direction. Risk-on mood continues supporting risk-sensitive currencies, while taking the US$ index near one-week lows as omicron fears ease as studies suggest the variant is milder than first expected. In other news. Intel apologies in China over a statement telling suppliers not to source from the Xinjian which region triggered a backlash. President Putin said today ‘we don’t want conflict over Ukraine”. France to launch litigation on post-Brexit fishing licenses in early Jan. – French minister tells reporters. Covid. The UK reduces covid self-isolation to 7-days from 10-days for people in England. Three new studies suggest omicron has lower hospitalization risk and is milder than other variants. China’s Xian locks down its 13 million residents as its covid cases rise. In currency markets. Commodity based currencies NOK, CAD, AUD & NZD all extend gains vs US$, while Turkish Lira extends its gains to below 11 vs US$. CNY is flat, while Asian currencies firm 0.2% on average. Trading currencies are mixed with JPY & ZAR are down 0.15%, while MXN is flat, NOK is up 0.2%, and AUD & NZD firm 0.4% vs US$.
Oil prices edge higher as Omicron fears ease, helped counter rising covid curbs amid surging covid cases into the Christmas holidays. C$ extends its gains retesting 1.28 vs US$ as risk appetite improves as Omicron fears ease and oil prices retest US$ 75pb. Intraday focus will be on a full US economic docket as well as CAD GDP expected at 0.8% vs 0.1% will provide direction to the markets today. Support resets to 1.2780 and resistance drops to 1.2870.
Euro benefits from an increasing risk sentiment but remains capped at 1.1350 ahead of PCE inflation data. The US$ has stabilized near 1-week lows ahead of US PCE inflation and Durable Goods Data, capping Euro below 1.1350. Intraday focus will be on the US data releases which may provide direction to the markets ahead of the Christmas holidays. Into the afternoon we anticipate markets will likely consolidate as trading activity slows into the Christmas Holidays. our bias remains to sell EUR on rallies.Support at 1.1250 and resistance at 1.1350.
EURGBP continues weaker with Brexit optimism and the UK holding off lockdowns is providing support to the pound. Support lowers to .8400 (1.1904) with resistance at .8600 (1.1628)
GBP tests monthly highs ahead of the US data releases. The pound capitalizes on the improving risk sentiment and breaches 1.34 ahead of high-tier data releases from the US. News that the UK PM was not expected to announce increased covid restrictions positive comments on Brexit is continuing to support the pound. Support at 1.3350 and resistance resets 1.3455.