Forex Today: Brexit drama continues, gold keeps advancing

FXStreet Team FXStreet

Here is what you need to know on Wednesday, December 9:

The Brexit drama continues, with contradictory headlines throughout the day. Still, such news had a limited effect on the pound, as investors turned cautious. Mid-European session, British Cabinet Minister Michael Gove has announced that they have reached an agreement in principle.

However, soon afterwards, and according to an EU source, EU’s chief negotiator Michel Barnier told European ministers that the chances of a deal are “very slim.” Even further, German Minister Michael Roth said that there was no substantial progress in the EU-UK trade talks, adding that "it remains totally uncertain whether Britain and EU can reach a trade deal." The latest on the matter is that UK PM Boris Johnson is traveling to Brussels this Wednesday to speak with European Commission President Ursula Von der Leyen. GBP/USD ended the day little changed, around 1.3160.

Most major pairs remained lifeless and confined to tight intraday ranges. The dollar edged higher but is far from bullish. EUR/USD trades above 1.2100, AUD/USD retains the 0.7400 threshold.

Wall Street turned positive during US trading hours after House Speaker Nancy Pelosi said she is hopeful of getting a coronavirus relief deal, providing support for Wall Street. US Treasury yields, on the other hand, ticked lower.

The UK kick-started massive COVID-19 vaccination with Pfizer’s vaccine. Markets payers are cautiously optimistic about an economic comeback while concerned about the current coronavirus developments. Meanwhile, the US continued to report record new contagions. The seven-day average stands at 196K, while the death toll is also at record highs.

Gold kept advancing, reaching $1,875.20 a troy ounce, its highest in two weeks. It closed the day around 1,872.50. Crude oil prices post modest daily losses ahead of US stockpiles reports.

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FXStreet

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GBP/USD clings to gains near 1.3400

GBP/USD retreats after reaching a three-week high above 1.3430, challenging the 1.3400 yardstick on Thursday. Although easing political uncertainty in the UK helps the quid limit its downside, escalating tensions in the Middle East support the Greenback, keeping Cable under scrutiny.

EUR/USD faces resistance around 1.1450

EUR/USD keeps the bid bias although it seems to have met a tough hurdle around 1.1450 on Thursday. The pair’s advance follows the bearish tone in the US Dollar despite escalating tensions in the Middle East and a broad-based cautious stance from market participants.

Gold flirts with two-day highs, approaches $4,130

Gold stages a modest rebound on Thursday, setting aside a three-day losing streak and managing to surpass the $4,100 mark per troy ounce. However, steady geopolitical tensions have revived concerns over persistently high global inflation, reinforcing expectations of higher rates across the board and somewhat curtailing the yellow metal’s upside potential.

Bitcoin stalls as mixed ETF flows, renewed US-Iran tensions cap upside

Bitcoin trades at $63,000 on Thursday, recovering slightly after facing rejection near $64,000. Renewed geopolitical uncertainty has dampened risk appetite, limiting BTC upside potential.

Japan may be changing its Yen strategy, but markets don’t look scared

Japan may be changing its intervention playbook, but that might not be enough to rescue the battered Yen. With USD/JPY hovering at four-decade highs, the currency’s weakness is being driven less by speculative pressure and more by a powerful structural force: the wide US-Japan rate gap.

Bye, forward guidance: How to trade when central banks choose silence

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