Forex Today: New month, fresh market gains, PMIs, Powell's testimony and Brexit eyed

Here is what you need to know on Tuesday, December 1

Markets have resumed their gains and the dollar is on the back foot once again as the dust settles from end-of-month flows. Optimism about vaccines and Brexit counter concerns from Powell and Yellen about the US economy. 

New month: November ended with a drop in stocks, correcting only a fraction of the considerable gains recorded during the month. The US dollar bounced back on Monday. After the dust settled, the greenback is on the back foot, equities are upbeat and also gold is edging higher toward $1,800.

GBP/USD has resumed its gains within the range amid upbeat comments about Brexit talks. Negotiators continue talks in London and strive to reach a deal this week. Fisheries and a level-playing field remain the thorny issues. 

EUR/USD is trading above 1.1950 after touching the 1.20 level on Monday. The preliminary November Consumer Price Index figures for the eurozone are set to show subdued inflation after German statistics fell short of estimates. Christine Lagarde, President of the European Central Bank, will speak again on Tuesday and will probably reiterate her commitment to adding stimulus later this month.

Vaccine: Moderna completed its COVID-19 immunization Phase 3 trial, confirming around 94% efficacy. The firm announced it submitted an application for emergency usage and a hearing is due on December 17. The Pfizer/BioNTech vaccine may be approved in the UK in the next few days and in the US next week. Another effort from Novavax is also gaining traction. The news underpins gains. 

Jerome Powell, Chairman of the Federal Reserve expressed concern about the current spread of the virus in prepared comments ahead of Tuesday's testimony. While he committed to supporting the economy, Powell did not hint if additional bond-buying will be announced later this month. \

See Powell's CARES Testimony Preview: A little optimism might help

Janet Yellen, Powell's predecessor at the Fed, was officially nominated as President-elect Joe Biden's Treasury Secretary. In an initial reaction, she echoed worries about the suffering in the months ahead but vowed to keep the American Dream alive. The most recent figures show yet another record in coronavirus hospitalizations, above 96,000. 

AUD/USD has resumed its gains amid US dollar weakness and on the background of the Reserve Bank of Australia's rate decision. The RBA left interest rates unchanged at 0.1% as expected. 

The US ISM Manufacturing Purchasing Managers' Index is set to edge down from the highs but remains on solid ground. The forward-looking indicator serves as a hint toward Friday's Nonfarm Payrolls report. 

See US ISM Manufacturing PMI Preview: With a tablespoon of salt

The Chinese Caixin Manufacturing PMI and a parallel figure from Japan both beat estimates, adding to the upbeat mood. Final industrial sector surveys are due out for the eurozone and the UK. 

WTI Crude Oil is battling the $45 level after OPEC+ members failed to reach an agreement on extending production cuts and are set to extend talks in the next few days.

USD/CAD is battling the 1.30 level amid the moves in petrol prices and ahead of Canada's Gross Domestic Product release. Third-quarter GDP is set to leap by 47.6% annualized after collapsing by 38.% beforehand. 

Bitcoin is consolidating its gains above $19,000 after flirting with all-time highs on Monday, hitting records on some exchanges but not on others. Ethereum and XRP remain at the top of their recent trading ranges. 

More Markets return to normal, and traders may be loving it

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD struggles around 1.19 amid Fed-fueled dollar strength

EUR/USD is under pressure around 1.19, as the dollar remains on the offensive following the Federal Reserve's hawkish decision on Wednesday. The bank is set to debate cutting down its bond buys and signaled raising rates sooner than anticipated. 


GBP/USD tumbles below 1.39 on weak UK data, dollar strength

GBP/USD has been extending its decline, sliding under 1.39. UK retail sales disappointed with -1.4% in May and the rapid spread of the Delta variant in the UK is also weighing on sterling. The US dollar remain robust after the Fed's hawkish decision.


GBP/USD tumbles below 1.39 on weak UK data, dollar strength

GBP/USD has been extending its decline, sliding under 1.39. UK retail sales disappointed with -1.4% in May and the rapid spread of the Delta variant in the UK is also weighing on sterling. The US dollar remain robust after the Fed's hawkish decision.


Ripple fears of a major decline are unwarranted

XRP price remains locked in a range between the psychologically important $1.00 and the neckline of a multi-year inverse head-and-shoulders pattern at $0.76. However, a lack of technical clues leaves frothy forecasts on the sideline until directional confirmation can be gleaned from the charts.

Read more

Where next for markets after the Fed shocker

The Fed surprised markets with an abrupt hawkish shift that has triggered substantial volatility in currency markets. Valeria Bednarik and Yohay Elam explain the surprise, discuss technical level, the next moves in FX and beyond.

Read more