Forex Today: Brexit and the US-China trade relationship near inflection points

Here is what you need to know  Monday, December 9th:

  •  An upbeat US employment report and a better-than-anticipated Michigan Consumer Confidence Survey boosted the USD on Friday, although its gains were moderated and uneven across the FX board.  US data released earlier in the week triggered concerns about the country’s economic health, keeping  the dollar’s gains at check.
  • The US is scheduled to apply more tariffs on China next December 15, and the market fears that, if phase one of a trade deal is not signed this week, the trade war will escalate further, affecting the global economy.
  • The EUR/USD pair held between the 1.10/1.11 range, still struggling for direction. The upside remains capped by dismal EU data signaling steepening economic slowdown entering Q4.
  • The GBP/USD pair held on to gains, trading at multi-month highs amid hopes UK PM Johnson will win the upcoming election and be able to pass his Brexit deal through the Parliament. The latest polls released during the weekend showed that Conservatives’ lead remains stable at 10 points. Elections this Thursday will likely unwind large move in GBP crosses.
  • Wall Street rallied on Friday, trimming all of its weekly losses. US Treasury yields bounced and posted modest weekly gains, underpinned by a robust US employment report.
  • Gold collapsed on renewed dollar demand, but the Japanese yen remained strong and settled against its American rival near its weekly high, somehow reflecting market’s caution.
  • Crude oil prices hit fresh multi-month highs after the OPEC+ decided to deepen cut by 500K b/d for a total adjustment of 1.7 million b/d.  Also, the Baker Hughes report showed that US active drilling rigs declined to 663 from 668 last week.
  • Cryptocurrencies held within familiar levels throughout the weekend, with the market’s action subdued. BTC/USD stable around $7,500. 

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