Here is what you need to know on Thursday, December 12:
The US dollar remains on the back foot after Jerome Powell, Chairman of the Federal Reserve, clarified that his personal bar for raising rates is high. He first wants to see significant and persistent inflation before hiking. Earlier, the Fed left rates unchanged as expected and signaled no changes in 2020 via its dot-plot.
Sino-American relations: President Donald Trump is set to meet his trade negotiators today to discuss the next steps ahead of the December 15 deadline to impose new tariffs on China. Recent reports suggest that the world's largest economies have made progress in talks, but that Trump has yet to decide. Some speculate that the president will move forward with tariffs, and that is not priced in by markets.
UK elections: The latest opinion polls are showing a lead of around nine points for the Conservatives over Labour, but in many constituencies the race is tight. The recent YouGov MRP poll has shown a substantial narrowing of the projected Tory majority to 28 seats against 68 in its previous survey. GBP/USD has been hovering above 1.32 as tension is mounting. Rainy weather awaits voters.
See UK Elections Preview: Five scenarios for the vote and potentially wild GBP/USD reactions
EUR/USD is trading at six-week highs around 1.1150, buoyed by USD weakness and ahead of Christine Lagarde's first decision as president of the European Central Bank. Economists expect her to leave policies unchanged after the massive and controversial stimulus from her predecessor Mario Draghi. Recent economic figures have been encouraging but growth remains meager. Lagarde is set to announce a policy review for the first time in a decade.
See ECB Preview: How Lagarde's debut December decision may drive EUR/USD higher, three scenarios
The Swiss National Bank is set to leave its Libor Rate unchanged at -0.75%. The SNB has not altered its rate since removing the EUR/CHF peg in the infamous "SNBomb" in January 2015.
The US producer prices report is set to show moderate rises in November. The Core Consumer Price Index (Core CPI) came out at 2.3% as expected.
USD/CAD is trading below 1.32 ahead of a speech by Stephen Poloz, Governor of the Bank of Canada. Oil prices have stabilized with WTI trading around $59.
Cryptocurrencies have been consolidating losses, with Bitcoin trading above $7,100.
News previews:
- Swiss rate decision (USD/CHF)
- ECB decision (EUR/USD)
- UK elections (GBP/USD)
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