Forex news from the European trading session - 17 December 2020
Headlines:
- Brexit: Barnier reportedly says a deal is 'possible' by Friday
- BOE leaves bank rate unchanged at 0.10%
- SNB's Jordan: US Treasury report has no impact on SNB policy
- Eurozone November final core CPI +0.2% vs +0.2% y/y prelim
- French president Emmanuel Macron has tested positive for COVID-19
- Bitcoin continues to surge, breaches $23,000 for the first time
- Japan finds record of at least 3,065 new coronavirus cases today - Nippon TV
- SNB's Maechler: Swiss franc remains highly valued
- SNB leaves policy rate unchanged at -0.75%
- France December business confidence 91 vs 81 expected
- Tokyo reports 822 new coronavirus cases in latest update today
- Germany reports 26,923 new coronavirus cases in latest update today
Markets:
- NZD leads, USD lags on the day
- European equities higher; E-minis up 0.5%
- US 10-year yields up 0.2 bps to 0.918%
- Gold up 0.9% to $1,881
- WTI up 0.5% to $48.06
- Bitcoin up 9.1% to $23,152
Following the Fed yesterday, the SNB and BOE policy meetings today were less eventful but the market was rather lively as the dollar slumped further amid a post-Fed hangover.
Powell reassured the market that the central bank will keep easy policy for longer and that continues to be music to the ears for risk trades, as the rally continues.
S&P 500 and Nasdaq futures are trading to record highs while European stocks are also gaining modestly after a hot start to the session earlier. In the currencies space, the dollar is the biggest loser as it sinks across the board.
USD/JPY slumped to a fresh low since March on a drop below support at 103.18-19 and is nearing the 103.00 handle ahead of North American trading.
Meanwhile, EUR/USD is continuing its breakout above 1.2200 while AUD/USD is trading to its highest levels since June 2018 above 0.7600.
The pound is among the biggest beneficiaries as Brexit hopes is also fueling gains in the quid, with cable rising from 1.3550 to above 1.3600 before a slight pullback.
Amid the dollar decline, gold also strengthened to a fresh one-month high above $1,880.
Elsewhere, Bitcoin is continuing its breakout to fresh record highs upon a break above $20,000 yesterday with price now trading back above $23,000.
Looking ahead, the market seems to still be putting in one last risk push before the year ends as the Fed essentially gives the green light to do so.
Just be wary of year-end flows that could mess with things in the coming week, though the big picture narrative remains rather clear after the FOMC meeting yesterday.
