Forex Today: Definitions’ time has arrived

FXStreet Team FXStreet

Here is what you need to know on Monday, December 21:

The financial markets keep gyrating around Brexit negotiations and US funding talks. The latter seems to be in better shape than the first one, although definitions on both are expected this week.

Regarding US stimulus, US lawmakers announced on Saturday they reached a compromise, paving the way for a $900 billion coronavirus relief package and government funding. A sticky point is a dispute over Fed’s lending facilities, as Republicans are against letting the central bank interfere in business. Additional headlines on the issue may come ahead of the weekly opening.

The greenback corrected extreme oversold conditions on Friday but resumed its decline ahead of the weekly close. EUR/USD finished the week around 1.2250, near its year’s high at 1.2272.

On the Brexit front, trade talks are still stuck. according to weekend headlines. Differences remain not only around fisheries but also on the level playing field.

On Saturday, UK Prime Minister Boris Johnson moved London and areas of Southeast England into tier-four level of restrictions, amid a new variant of the coronavirus, which seems to be much more contagious. Johnson said that there’s no reason to believe the vaccine will be any less effective against it. Still, discouraging news may push sterling lower at the weekly opening.

Gold had spent the week mute just below the $1,900 level. Could get a boost and gap higher once the US announces financial decisions.

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FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

GBP/USD remains offered; bears target 1.3600

GBP/USD now leaves behind part of its recent recovery and revisits the low 1.3600s at the beginning of the week. Indeed, Cable trades with a mild downward bias amid decent gains in the Greenback as investors remain wary of upcoming US data releases and the Jackson Hole event.

EUR/USD slips back to 1.1660, daily lows

EUR/USD remains slightly offered and drops toward the 1.1660 zone to hit daily troughs on Monday. The pair’s decline follows a decent advance in the US Dollar while investors continue to closely follow developments from the US money market.

Gold poised to extend its bullish run

Gold surrenders part of its initial advance, although it keeps its bullish pace well and sound above the $4,600 mark per troy ounce on Monday. The precious metal’s move higher comes despite slight gains in the US Dollar and a modest pullback in US Treasury yields across the curve.

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Bessent’s presser in focus

Preview: Busy week ahead, with Bessent kicking this off today, with things wrapping up with Warsh at Jackson Hole. For a month that should have been a temporary period of ‘quiet’, we had anything but last week, with the bond market and tariffs front and centre.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.