Things to watch out for on Tuesday, December 6:
The US dollar ended Monday with important gains, after having started the day on the wrong foot. The dollar initially fell on news from China as different districts are easing their COVID-19 restrictive measures, while market talk pointed to further easing in January.
Markets reversed after encouraging US data releases, with the dollar accelerating its advance before the Wall Street close. The official November services PMI improved more than expected, rising to 56.5 from 54.4 and beating the 53.1 expected. Also, factory orders rose 1%m/m in October, better than the 0.7% advance expected, while S&P Global revised its November services PMI up to 46.2 from a preliminary estimate of 46.1.
On the eve of the central bank meeting in December, the head of economic policy from the bank European Central Bank (ECB), Gabriel Makhlouf, declared that a 50 basis point rate hike is the minimum necessary, adding that he would not rule out a 75 basis point hike. The ECB and the US Federal Reserve (Fed) will announce their decisions on December 15 and 14, respectively, and policy makers will enter their blackout period next Thursday.
EUR/USD is trading around 1.0480, while GBP/USD plunged to the 1.2160 price zone. Commodity currencies also came under strong selling pressure, with AUD/USD struggling around 0.6670 and USD/CAD approaching 1.3600.
Crude Oil prices rose early in the day on the china news, which supposes a constant demand, and because OPEC+ announced its decision to maintain its decision to reduce oil production by 2 million barrels per day. Another factor weighing on oil prices was the latest decision by the EU to cap oil prices. Moscow said it will not recognize the price cap and is preparing a decision. Black gold drifted south in the US early afternoon, posting heavy losses amid broad dollar strength. WTI stood at $77.20 a barrel.
Gold rose as high as $1,810 a troy ounce early in the day, but tumbled on renewed demand of dollar and ended the day at around $1,766 a troy ounce.
The dollar also rose against safe-haven currencies, and USD/JPY rallied towards the 136.70 zone.
The Reserve Bank of Australia will announce its decision on monetary policy early on Tuesday.
Cryptocurrencies plummeted with the resurgence in American demand. BTC/USD is trading around $16,900, down more than $1,000 on the day.
Did you like this article? Help us with a comment by answering this survey:
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
