FX Today: Markets thin as the new year rolls around

Joshua Gibson FXStreet

In forex today, markets have ground to a near-halt heading into the New Year's shutdown to round out the holidays, and although the latter half of this week could see an influx of fresh volumes into the broader markets, the fx marketspace remains tepid as investors take a step back and reassess their bets heading into 2019.

Major pairs remain firmly planted within recent ranges as Monday's action sees G10 currencies hobbled on paper-thin volumes; the EUR/USD pairing remains trapped near the high end of last week's range near 1.1450 and threatening to head lower to kick off 2019, while the Sterling-Dollar pairing continues to splash around just south of 1.2700, a key technical level that has seen the Cable restrained since Brexit proceedings seized up in early December. The USD/CAD pair continues to tick thinly into near-term highs near 1.2650 as slumping oil prices continue to pull the rug out from underneath the Candian Loonie, but anemic holiday markets are preventing any major market moves from unfolding.

In the Pacific-Asia sector, the Aussie is seeing some early-week pre-holiday bidding on reassurances that trade talks between the US and China are, in fact, progressing, but details remain thin and evidence of forward momentum remains trapped behind vague headlines and frequent trade-centric tweets from US President Donald Trump. The USD/JPY remains trapped near 110.50 as the Greenback holds near last week's low points, and a fresh round of capital to come later in the week could see a rebound for the pair, depending on how investors plan to grapple with US Federal Reserve chairman Jerome Powell's off-the-cuff approach to handling FOMC statements through 2019.

Key headlines from the Asian session:

UK MPs set to delay Brexit if May's Brexit deal fails - UK's Telegraph

Goldman Sachs makes another cut to 2019 Fed rate hike forecast

China sees first manufacturing decline in 2.5 years - Reuters

Trump tweets from the weekend on China and trade

Fed head Powell set to give markets a rough ride in 2019 - Reuters

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.