Forex Today: Dollar’s weakness keeps spreading, Brexit deal awaited

FXStreet Team FXStreet

Here is what you need to know on Wednesday, December 16:

The dollar found some market favor at the beginning of the day amid a risk-off mood but ended the day in the red against most major rivals.

The sentiment was sour amid fresh coronavirus-related lockdowns in the US and Europe, as e New York Mayor Bill de Blasio warned that the city needs to prepare for a full shutdown, as the number of hospitalizations keeps growing. Germany, the Netherlands, and London have announced tight restrictive measures.

Brexit tensions keep mounting. UK PM Boris Johnson’s spokesman said that the UK wants a post-Brexit deal but not “at any cost.” PM Johnson told his senior minister that the most likely outcome was a no-deal Brexit. The news feeds were flooded by rumors and speculation, but no official announcement has been made at the end of the day. Speculation that the EU and the UK are close to clinching a deal sent GBP/USD to the 1.3450 price zone.

The Canadian dollar was the best performer, with USD/CAD falling below 1.2700 a fresh multi-year low. Higher oil prices and Wall Street’s advance underpinned the commodity-linked currency.

The US Electoral College formally voted to elect Joe Biden on Monday, and Senate Majority Leader Mitch McConnell acknowledged Joe Biden as the president-elect.

The US Food and Drug Administration confirmed that the Moderna’s coronavirus vaccine has an overall efficacy of over 94%, and could grant it emergency use before the weekend. A group of experts is set to meet next Thursday to offer their recommendations.

Gold prices surged to fresh weekly highs above $1,850 a troy ounce, amid the broad dollar’s weakness. WTI settled at $47.50 a barrel.

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EUR/USD tests nine-day EMA support near 1.1850

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1870 during the Asian hours on Friday. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming steady momentum. RSI has eased but remains above 50, indicating momentum remains constructive for the bulls.

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

The GBP/USD pair remains on the defensive through the Asian session on Friday, though it lacks bearish conviction and holds above the 1.3600 mark as traders await the release of the US consumer inflation figures before placing directional bets.

Gold recovers swiftly from weekly low, climbs back closer to $5,000 ahead of US CPI

Gold regains positive traction during the Asian session on Friday and recovers a part of the previous day's heavy losses to the $4,878-4,877 region, or the weekly low. The commodity has now moved back closer to the $5,000 psychological mark as traders keenly await the release of the US consumer inflation figures for more cues about the Federal Reserve's policy path.