Forex Today: Eyes on US data before holiday trading sets in

Eren Sengezer FXStreet

Here is what you need to know on Thursday, December 22:

After having closed modestly higher on Wednesday, the US Dollar Index turned south and declined below 104.00 early Thursday amid an improving market mood. The 10-year US Treasury bond yield stays below 3.7% and US stock index futures post small daily gains. The US Bureau of Economic Analysis will release the final estimate of the third-quarter Gross Domestic Product (GDP) growth. The US economic docket will also feature the weekly Initial Jobless Claims data and the Federal Reserve Bank of Chicago's National Activity Index for November.

On Wednesday, the data from the US revealed that Existing Home Sales declined by 7.7% on a monthly basis in November. Additionally, the one-year consumer inflation rate expectation of the Conference Board's Consumer Sentiment Survey dropped to 6.7% in December from 7.1%. Wall Street's main indexes gained traction and made it difficult for the US Dollar to gather strength in the second half of the day.

Supported by the selling pressure surrounding the US Dollar, EUR/USD climbed toward 1.0650 during the Asian trading hours on Thursday. In its latest monthly report, Germany's finance ministry said that it expects the economic activity in Germany to remain subdued during the fourth quarter of this year and the first quarter of 2023.

GBP/USD edged modestly lower toward 1.2100 in the early European morning on Thursday. The data published by the UK's Office for National Statistics (ONS) announced that the Gross Domestic Product (GDP) grew at an annualized rate of 1.9% in the third quarter, missing the market expectation for an expansion of 2.4%.

Following the sharp decline witnessed on Tuesday, USD/JPY managed to register small daily gains on Wednesday but struggles to extend its recovery on Thursday. At the time of press, USD/JPY was trading in negative territory at around 132.00. The data from Japan showed earlier in the day that the Leading Economic Index edged slightly higher to 98.6 in October from 98.2 in September.

With the 10-year US T-bond yield fluctuating in a tight range on Wednesday, Gold price struggled to make a decisive move in either direction. CAU/USD continues to trade flat on the day slightly above $1,810 early Thursday.

On Wednesday, the data from Canada revealed that the annual Consumer Price Index declined to 6.8% in November from 6.9% in October. USD/CAD showed no reaction to the inflation report on Wednesday but started to edge lower early Thursday, falling below 1.3600 in the European morning.

Bitcoin continues to move sideways slightly below $17,000 and Ethereum stays quiet at around $1,200 as trading action in the crypto market remains subdued.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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