Here is what you need to know on Wednesday, December 29:
The US Dollar Index closed the second straight day in the positive territory and continues to inch higher on Wednesday but markets are likely to remain quiet ahead of the New Year holiday. Later in the day, November Pending Home Sales and Goods Trade Balance will be featured in the US economic docket but these data are unlikely to trigger a noticeable market reaction.
Wall Street's main indexes closed mixed on Tuesday and US stocks futures indexes are posting modest gains in the early European session. The 10-year US Treasury bond yield continues to move sideways in a narrow range below 1.5%.
The US, the UK, France, Greece and Portugal all registered record-high one-day increases in new coronavirus cases on Tuesday but this development doesn't seem to be having a significant impact on risk sentiment. Reports continue to suggest that the Omicron variant is less severe than the Delta variant.
EUR/USD is testing 1.1300 after closing in the negative territory on Tuesday as the dollar's market valuation continues to drive the pair's movements.
GBP/USD turned south after touching its highest level in five weeks at 1.3463 on Tuesday. The pair is currently posting small losses around 1.3420.
USD/JPY preserves its bullish momentum and stays within a touching distance of 115.00 early Wednesday.
Gold climbed to its strongest level since late November at $1,820 on Tuesday but made a sharp U-turn. XAU/USD is edging lower toward $1,800 in the European morning.
Bitcoin lost more than 6% and broke below $50,000 on Tuesday before going into a consolidation phase around $48,000. Ethereum also suffered heavy losses and fell below $4,000 after managing to hold above that level in the previous five days.
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AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.