Forex news for North American trading on December 17, 2020:
- Johnson: It now looks very likely agreement won't be reached unless EU positions shifts substantially
- Pelosi says she hopes text of a deal on stimulus can be released today
- Von der Leyen: Big differences remain to be bridged, particularly fisheries
- Canada Teranet Oct house price index +9.0% y/y vs +8.1% prior
- US Initial jobless claims 885K vs. 818K estimate
- US November housing starts 1547K vs 1535K expected
- Philadelphia Fed business outlook for December 11.1 vs. 20.0 estimate
- Mexican central bank overnight rate held at 4.25%, as expected
- Sen. Schumer: We are very close to an agreement, but details matter
- McConnell: We're going to stay right here until we are finished
- Trump: Stimulus talks looking very good
- ADP Canada Nov employment +40.8K vs -79.5K prior
Markets:
- Gold up $21 to $1885
- WTI crude up 53-cents to $48.35
- US 10-year yields up 1.5 bps to 0.93%
- S&P 500 up 21 points to 3722 - a record high
- Bitcoin hits $23,730 before finishing $1000 lower
- AUD leads, USD lags
Late-breaking headlines with Boris Johnson offering a negative assessment of talks with the EU led to a 50 pip drop in cable to halve the gains on the day. The readout from the same call from von der Leyen was more positive but that was ignored in a sign that a deal is more priced in than not.
The general theme was US dollar weakness and that had a number of knock on effects, especially in the hot commodity market. Gold gained 1% and industrial metals continued to rally.
In FX, USD/JPY fell through the November low to the worst levels since the pandemic and the euro continues to break to fresh highs.
It's all about dollar shorts at the moment and yesterday's small dip on the FOMC showed that sellers are waiting in the weeds.
There were some late signs of caution as the commodity bloc edged lower after Europe went home -- particularly CAD. USD/CAD briefly dipped below 1.27 but couldn't break the weekly low and that held to a bounce to 1.2732.
