Forex Today: Markets turn cautious to start the big central bank week

Eren Sengezer FXStreet

Here is what you need to know on Monday, December 12:

Markets seem to have turned cautious at the beginning of the week with participants staying on the sidelines ahead of this week's eagerly-awaited central bank policy announcements and high-tier macroeconomic data releases. The US Dollar Index holds steady above 105.00 following last week's choppy action, US stock index futures trade flat in the European morning and the 10-year US Treasury bond yield stays calm above 3.5%. The European nor the US economic docket will not be featuring any data releases on Monday. There will be auctions for 10-year and 3-year US Treasury Notes later in the day.

Chinese officials announced earlier in the day that they will take the application used to track coronavirus cases offline later in the week. Additionally, Bloomberg reported that China may partially open borders with Hong Kong from next month, allowing people to travel freely heading into the Lunar New Year holidays. Nevertheless, the Shanghai Composite Index and Hong Kong's Hang Seng Index both remain on track to end the day in negative territory.

EUR/USD stays on the back foot early Monday but continues to fluctuate above 1.0500. The pair failed to make a decisive move in either direction last week and closed virtually unchanged.

GBP/USD edged lower during the European trading hours and dropped below 1.2250. The data published by the UK's Office for National Statistics (ONS) revealed on Monday that the Gross Domestic Product expanded by 0.5% on a monthly basis in October following September's 0.6% contraction. Although this reading came in much better than the market expectation of 0.1%, it failed to provide a boost to Pound Sterling. Other data from the UK showed Industrial Production remain unchanged in October while Manufacturing Production rose by 0.7%.

USD/JPY climbed above 137.00 earlier in the day but struggled to preserve its bullish momentum. The data from Japan showed on Monday that Machine Tool Orders contracted by 7.8% on a yearly basis in November and the annual Producer Price Index arrived at 9.3% in November, surpassing the market expectation of 8.9%.

Gold price advanced beyond $1,800 late Friday but started the new week under modest bearish pressure. XAU/USD was last seen trading in negative territory slightly below $1,790.

Bitcoin spent the weekend in a very narrow range and started to inch lower early Monday. BTC/USD was last seen trading slightly below $17,000. Ethereum fluctuates in the lower half of its two-week-old range at around $1,250.

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.

GBP/USD holds near Feb. 11 highs as bulls await breakout above 1.3660

The GBP/USD pair trades with a positive bias around mid-1.3600s at the start of a new week and remains well within striking distance of its highest level since February 11, touched on Friday. Moreover, the fundamental backdrop favors bullish traders and backs the case for an extension of a nearly one-month-old uptrend.

EUR/USD holds steady amid US debt strategy

EUR/USD remains stronger for the fourth successive trading day, hovering around 1.1680 during the Asian hours. The currency pair holds its ground as the US Dollar struggles under pressure from newly announced United States fiscal moves. The Treasury Department surprised financial markets by pledging to at least double its buybacks of longer-dated government debt in an attempt to rein in rising bond yields.

Gold keeps rallying toward $4,700, fresh three-month highs

Gold extends its last week's stellar performance into Asian trading on Monday, refreshing three-month highs beyond $4,600. The precious metal capitalizes on persistent US Dollar weakness, following the US Treasury's buyback plan amid fresh US-Canada trade tensions.

Here's what I learned trading meme coins

I’ve been trading cryptocurrencies for the past seven years, with meme coins becoming one of the most exciting and implacable parts of my experience. I love them because they represent internet culture and community sentiment, and, let’s be honest, extreme speculation. Newly launched meme coins were especially tempting: get in early enough, I thought, and a small bet could turn into a huge return.

The week ahead: Jackson Hole and Nvidia results to take focus away from Trump

We start the week with the focus squarely on the US. Rising Treasury yields, the Jackson Hole Symposium, inflation and GDP data, along with tariff risks, will dominate market action in the coming days.

$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.