The markets are pretty quiet this morning as traders are finishing early all over the world ahead of the Christmas holiday. The US Durable Goods release yesterday, which came in at -2.0% much lower than the expected +1.5%, had little effect on traders. US Equity markets remain strong helping support the USD. The DOW closed almost 100 points higher yesterday and while trading volumes are expected to be subdued today, DOW Futures are pointing towards a positive opening of around 25 points later this morning. Once again investors are more concerned with US-China trade than economic numbers. The US stock markets will be closing this afternoon at 1:00 pm, and will reopen on Thursday for a regular session.
EUR/USD continues to trade towards the lower end of the latest trading range as many traders in Europe have already began their Christmas holiday. Expect the quiet trade to continue through the North American trading session.
GBP/USD remains pressured by Brexit. As with the other currencies, the markets are quiet as most traders in London have called it a day. There are no economic releases due today. Concerns about the “no-deal” Brexit will weigh on the GBP and we could see some selling after the Christmas break. Prime Minister Johnson has made it pretty clear that the UK will leave the EU on January 2020, deal or no deal.
USD/JPY also trading in a very quiet range as traders look to the pair, deciding whether or not to enter into safe haven trades. Expect the USD/JPY to continue to trade off of the US-China news and presently everything seems to be going to plan with the agreement due to be signed in January.
The Canadian dollar moved lower overnight, despite an uptick in the oil prices. Traders are focused on a larger-than-expected drop in retail sales of 1.2% which causes concern that the Canadian economy is slipping as we end the year.
As expected, the PBOC set the USD/CNY fix at 7.0119. Chinese Premier Li Keqiang did state that the government is considering making further cuts to the reserve requirement ratio (RRR) in the new year. The only currency to react was the Australian Dollar as they are major trading partners with China.