This is what you need to know to trade today friday december 16:
The dollar benefited from the risk aversion that reigned in the markets on Thursday and outperformed its main rivals, with the Dollar Index gaining almost 1%. Market sentiment appears to have improved modestly early on Friday, making it difficult for the US dollar to consolidate Thursday’s recovery. S&P Global will report preliminary manufacturing and services PMIs for Germany, the Eurozone, the United Kingdom and the United States later in the day. The final revision of the inflation figures for November and the trade balance data for October will also feature on the European economic agenda.
On Thursday, the Bank of England (BoE) and the European Central Bank (ECB) decided to raise interest rates by 50 basis points (bp), as expected. However, the BoE statement revealed that two members of the Monetary Policy Committee voted to keep rates unchanged, causing sterling to weaken against its rivals.
Later in the session, the ECB President Christine Lagarde, said in the post-meeting press conference that it was obvious they should expect additional 50 basis point rate hikes over a “period of time.” Elaborating on the matter, Lagarde noted that the information they currently have predicts a 50 basis point hike in key rates in the next two meetings. Although Lagarde’s surprisingly aggressive remarks buoyed the euro, the intense flight to safety during US trading hours allowed the dollar to remain strong. Earlier on Friday, US stock index futures posted modest daily gains.
The pair EUR/USD It reached its highest level in more than six months at 1.0737 on the initial reaction to Lagarde’s comments, but turned sharply in the second half of the day, closing in negative territory below 1.0630. The pair remains in positive territory above 1.0650 early Friday.
ECB Quick Analysis: Bulls Take Major Concessions, EUR/USD Set to Rally (Assuming Spreads Calm)
The GBP/USD it lost more than 200 points on Thursday, but managed to stage a modest bounce towards the 1.2200 zone on Friday. Data released by the UK’s Office for National Statistics revealed that retail sales in November declined by 0.4% after rising 0.9% in October. Although this reading was worse than the market expectation for a 0.3% expansion, it failed to trigger a notable market reaction.
BoE Analysis: Three reasons why the British pound will continue to suffer
Driven by the overall strength of the US dollar, the USD/JPY gained over 200 pips on Thursday and rose towards 138.00. Earlier in the day, data from Japan showed the Bank of Japan Manufacturing PMI dipped to 48.8 in early December from 49 in November. On a positive note, Jibun Bank’s services PMI rose to 51.7 in the same period from 50.3. However, the pair remains lower in the European morning and falls back towards 137.00.
On Thursday, the Swiss National Bank raised its official interest rate 50 basis points to 1%. Commenting on the outlook for monetary policy, SNB Chairman Thomas Jordan hinted at further rate hikes by stating that “long-term inflation forecasts are rising slightly, indicating that current monetary policy does not ensure that stability of prices is assured”. Nevertheless, the USD/CHF shook off the bearish pressure and closed slightly higher on Thursday before entering a consolidation phase slightly above 0.9250 early on Friday.
The price of Prayed it lost more than 1.5% on Thursday. With the 10-year US Treasury yield holding below 3.5%, XAU/USD staged a rally to break above $1,780 on Friday. China’s state planner, the National Development and Reform Commission (NDRC), stated on Friday that economic growth was expected to continue picking up pace after the implementation of the new COVID rules. Markets are awaiting announcements after the Central Economic Work Conference.
The Bitcoin it tumbled amid risk aversion and erased most of its weekly gains on Thursday. The BTC/USD pair traded slightly higher near $17,500. ethereum it fell more than 3% on Thursday, but had no difficulty staying above it. At time of writing, ETH/USD is up almost 1% on the day, at $1,280.
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.
