While the Nasdaq 100 is surging again today, the euro is in retreat ahead of tomorrow’s expected ECB rate cut, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Stocks rally following US inflation data
Risk sentiment had been kept in check ahead of the inflation print today, but the news has unleashed fresh buying. Technically the ‘Santa Rally’ doesn’t usually start for a few more days, but the Nasdaq 100 has got its gains in early, surging to a new record high. Interestingly, we have seen the dollar push higher too even though today’s figures are unlikely to mean the Fed will swerve from a rate cut next week. But looser rates should mean stronger economic growth, reinforcing the desire of investors to keep investing in the US.
Canada cuts rates, ECB’s turn next?
The euro is dropping against the dollar and sterling ahead of the ECB’s decision tomorrow. It will be the second bank to do so in 24 hours, following Canada’s lead this afternoon. While both the ECB and the Fed are in easing mode, they are conducting this policy for very different reasons – for the ECB, it’s a question of doing what it can to prop up an ailing economy whereas the Fed can enjoy gently easing policy to support more solid growth.
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EUR/USD trades deep in red below 1.0300 after strong US jobs report
EUR/USD stays under bearish pressure and trades below 1.0300 in the American session on Friday. The US Dollar benefits from the upbeat jobs report, which showed an increase of 256,000 in Nonfarm Payrolls, and forces the pair to stay on the back foot heading into the weekend.
GBP/USD drops toward 1.2200 on broad USD demand
GBP/USD extends its weekly slide and trades at its weakest level since November 2023 below 1.2250. The data from the US showed that Nonfarm Payrolls rose by 256,000 in December, fuelling a US Dollar rally and weighing on the pair.
Gold ignores upbeat US data, approaches $2,700
Following a drop toward $2,660 with the immediate reaction to strong US employment data for December, Gold regained its traction and climbed towards $2,700. The risk-averse market atmosphere seems to be supporting XAU/USD despite renewed USD strength.
Sui bulls eyes for a new all-time high of $6.35
Sui price recovers most of its weekly losses and trades around $5.06 at the time of writing on Friday. On-chain metrics hint at a rally ahead as SUI’s long-to-short ratio reaches the highest level in over a month, and open interest is also rising.
Think ahead: Mixed inflation data
Core CPI data from the US next week could ease concerns about prolonged elevated inflation while in Central and Eastern Europe, inflation readings look set to remain high.
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