This is what you need to know to operate the Thursday, December 23:
What started out as a relatively subdued session for the currency markets became significantly more risk-friendly as the American session got underway, with risk sensitive currencies and outperforming safe haven currencies. Sentiment took a turn for the better in the middle of Wednesday after the Strong December Consumer Confidence in the United States and Third Quarter GDP Final Data, and amid a series of positive updates related to the pandemic.
The US FDA Approves Covid-19 Treatment Pill highly effective from Pfizer (for “high risk” patients) and three new studies (one from South Africa, one from Scottish universities and one from Imperial College London), showed that Omicron infection is significantly less likely to result in hospitalization. Amid appetite for risk, which also saw global stock markets and commodities gain traction, the US dollar weakened due to its safe-haven status. That pushed the DXY index down around 0.4% to trade just above the 96.00 level, although market participants will note that this is still within December ranges and warrants caution in currency market movements amid thin bargaining conditions before the holidays.
The Japanese yen also performed poorly and, along with the US dollar, they were the bottom two places on the G10 performance chart. By contrast, risk-sensitive AUD, NZD and GBP were the best in the G10 on the day, gaining between 0.7 and 0.9% on the day each. The AUD/USD rose 60 pips to return above 0.7200, the NZD / USD gained 50 pips to return above 0.6800 and the GBP/USD it gained nearly 100 pips to move above 1.3350, with each pair within a few pips of its monthly highs. A mixed UK GDP report released during European trading hours did not affect GBP traders.
For its part, the CAD gained around 0.6% against the dollar, pushing the USD / CAD again below 1.2850, more than 100 pips below yearly highs reached above 1.2950 on Monday. The euro and Swiss franc were up around 0.4% against the dollar on Monday as a result of the weakness of the USD rather than based on any internal fundamentals. Overall, the optimistic vibes from the ECB policy makers speaking on Wednesday do not appear to have changed the scoreboard much for the euro, with the EUR/USD within the December ranges of 1.1240-1.1360.
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
