Forex Today: Rising Sino-American tensions curb vaccine and stimulus enthusiasm, Brexit eyed

Here is what you need to know on Monday, December 7:

The first full week of December kicks off with a mixed market mood. New US sanctions on Chinese officials weigh on the market mood while weak Nonfarm Payrolls raise hopes for a stimulus package. The FDA is set to approve a COVID-19 vaccine later in the week and Brexit talks continue at a higher intensity.

Nonfarm Payrolls and stimulus: The US gained only 245,000 jobs in November, nearly half the expected increase. The spread of the virus in America and the lapse of several federal support programs are taking their toll. Investors hope that the figures will convince Congress to strike a new stimulus deal, perhaps along the lines of the $908 billion bipartisan proposals. Reports suggest Senate Majority Leader Mitch McConnell is reluctant to move. 

Virus fears: The seven-day average of daily coronavirus deaths has hit 2,171, topping the record seen in the spring. Hospitalizations are at a peak of over 101,000 and average daily cases is nearing 200,000. California has enacted strict limits and other states are also curbing movement. Infections remain elevated in Germany and edging lower in other large European countries.

Vaccine hopes: The US Food and Drugs Administration (FDA) is set to approve the Pfizer/BioNTech covid immunization on Thursday, opening the door to the first injections on the following day. The UK will administer its first inoculations on Tuesday. Optimism about vaccines keeps markets bid.

Sino-American tensions have risen again amid a report stating the US is preparing new sanctions against around 14 Chinese officials. Beijing said it firmly opposes new restrictions. 

Brexit: UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen spoke on Saturday and agreed to extend talks. Intense negotiations continue in Brussels with reports on compromises yet without a breakthrough. Chief EU Negotiator Michel Barnier told envoys that disagreements remain on the three contentious issues – fisheries, governance, and the level-playing field. GBP/USD is trading around 1.34, off the highs seen late last week.

EUR/USD is changing hands above 1.21 after German industrial output beat expectations at 3.2% in October. Markets await the European Central Bank's decision on Thursday, with a potential expansion of the bond-buying scheme eyed. 

Gold is consolidating its gains around $1,840 while oil price edge lower, with WTI around $46. 

Cryptocurrencies are off their highs. Bitcoin is changing hands at around $19,000. 

More Dollar downfall explained and what's next for markets

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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 


GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 


Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News