What you need to take care of on Tuesday, December 13:
The US Dollar started the week on the back foot but changed course during the American session to end the day with uneven gains against its major rivals. Asian and European indexes closed in the red, while Wall Street managed to post gains after a tumultuous week.
Action, however, was limited amid a scarce macroeconomic calendar and ahead of several first-tier events, starting Tuesday with an update on US inflation, then followed by monetary policy decisions from the US Federal Reserve, the Bank of England and the European Central Bank.
The New York Federal Reserve released the Survey of Consumer Expectations, which showed that inflation expectations have fallen for the year ahead, although they remain elevated. At the same time, the survey indicated that expected inflation marked a record month-to-month decline in November, while the median inflation uncertainty decreased in the short and medium term.
The EUR/USD pair settled at around 1.0520 after peaking at 1.0580. The GBP/USD pair trades around 1.2250, unable to extend gains beyond 1.2300 despite generally positive UK data. The October Trade Balance posted a deficit of £14.476 billion, while the monthly GDP rose by 0.5%, beating the 0.1% decline expected.
The Australian dollar edged lower against its American rival, with AUD/USD currently trading at around 0.6740. The USD/CAD pair lost some ground and settled at 1.3636, as the Canadian Dollar benefited from strengthening oil prices. Exports from Russia’s Black Sea terminals were suspended on Saturday amid a storm in the region, boosting prices. WTI currently trades at $73.10 a barrel.
China further relaxed its coronavirus-related restrictions but there was little market reaction to the positive headline.
The US Dollar surged against safe-haven rivals. USD/JPY trades around 137.80 while spot gold battles around $1,780.
The US will release the November Consumer Price Index on Tuesday. Annual inflation is foreseen at 7.3%, easing from the previous month’s 7.7% rate, while the core CPI, which excludes volatile food and energy prices, is expected to have risen by 6.1%. On Wednesday, the US Federal Reserve (Fed) will announce its decision on monetary policy, while the European Central Bank (ECB) will do the same on Thursday. Both central banks are expected to hike rates, although the extent of such hikes is uncertain. The Fed may slow the pace of tightening and proceed with a 50 bps hike, while the ECB may finally turn hawkish.
Like this article? Help us with some feedback by answering this survey:
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.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.