Forex news from the European trading session - 18 December 2020
Headlines:
- Moderna coronavirus vaccine expected to be granted FDA emergency-use authorisation today
- UK PM Johnson: Our position is we want to keep talking if there is a chance of a Brexit deal
- Wilbur Ross confirms that US has moved to blacklist China's top chipmaker SMIC
- UK December CBI trends total orders -25 vs -40 expected
- Germany December Ifo business climate index 92.1 vs 90.0 expected
- EU's Barnier: Fisheries still one of the biggest difficulties in Brexit talks
- EU's Barnier: Brexit talks have narrow path to an agreement
- BOJ's Kuroda: It is too early to taper ETF purchases
- UK November retail sales -3.8% vs -4.2% m/m expected
- BOJ's Kuroda: It will take time to hit 2% price target
- US reportedly to blacklist dozens of Chinese firms, including top chipmaker SMIC
- Germany reports record 33,777 new coronavirus cases in latest update today
Markets:
- CHF leads, GBP lags on the day
- European equities a little higher; E-minis up 0.1%
- US 10-year yields flat at 0.934%
- Gold up 0.1% to $1,887.03
- WTI flat at $48.37
- Bitcoin up 0.9% to $22,990
It was a largely quiet session with the risk mood keeping more tepid earlier on, before a bit of a recovery to keep near flat levels and little changed overall.
The dollar was stronger as risk retreated following a report that the US is to place dozens of Chinese firms on its economic blacklist, including top chipmaker SMIC.
US commerce secretary Ross confirmed it later in the day but the market has already brushed that aside somewhat as US futures turned losses into slight gains now.
As such, the dollar gave back most of its early advantage with USD/JPY falling from 103.59 to 103.25 upon testing key near-term levels.
EUR/USD also bounced from 1.2239 to 1.2265 while AUD/USD has moved up from 0.7583 to 0.7617 as major currencies trimmed early declines against the dollar.
The pound is keeping as the weakest performer as Brexit talks drag on further to the weekend with the likelihood of extending further to next week as well.
Cable eased to 1.3489 in the early London morning before recovering to 1.3540 levels.
Looking ahead, there isn't much left for the market to work with before the year comes to a close with US stimulus and Brexit talks being the two key leftover issues.
Both may even have the capacity to stretch on until the new year, so don't hold your breath. For now, the market seems to be winding down after moving on the Fed yesterday with risk trades also looking more lackadaisical ahead of the weekend.
