Things to watch out for on Wednesday, January 4:
The US dollar returned strongly on Tuesday and soared against its main rivals. The dollar started the day on the wrong foot but gained ground early in the European session, triggering the stops and further accelerating its advance.
Financial markets were upbeat earlier in the day, with Asian stocks rising on signs that coronavirus infections may have peaked in China. Hopes that the country would soon reverse the latest economic downturn faded as the session unfolded, with Asian indices ending the day around their opening levels. European and US indices also rose, although Wall Street quickly reversed course and ended the day in the red.
According to the meeting of the EU Health Security Committee, the EU countries reached an agreement on a coordinated approach to the COVID-19 situation, including the implications of increased travel from China.
On a positive note, Germany published the preliminary estimate of the Harmonized Price Index to Consumption (HICP) December, which rose at an annual rate of 9.6%, well below the 10.7% forecast, and down from 11.3% in November.
The EUR/USD pair is trading around 1.0550 and from a broader perspective the decline looks corrective. The pound was the most resistant currency, down as low as 1.1975 against the dollar. AUD/USD is trading around 0.6730, while USD/CAD has shot up to 1.3680. Finally, the USD/JPY pair ended the day little changed around 130.70 after trading as high as 129.49.
Gold rose as high as $1,850 and then pulled back, ending the day with gains around $1,836 a troy ounce. Crude oil prices plunged, with WTI trading around $76.70 a barrel.
Attention shifts to the US, as on Wednesday the ISM manufacturing PMI and the FOMC meeting minutes.
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.
