Forex news for North American trading on December 7, 2020
- Dow closes lower for the 1st time in 5 days. NASDAQ record close
- Bitcoin trades below hourly moving averages
- US consumer credit $7.228 billion vs. $15.5 billion estimate
- US crude oil futures settle at $45.76
- Joint statement from EU/UK. No deal...yet. PM Johnson to go to Brussels for last ditch effort.
- Ireland Coveney: No Brexit progress at all and last 2 days
- Brexit: Divisions over fisheries in the Brexit negotiations have deepened
- Merkel aims to close retail shops for a period after Christmas after Christmas
- European major indices end the day mostly lower. UK FTSE 100 as a small gain
- Brexit: Joint committee discussions said to be progressing well
- Mnuchin hosts G7 call with finance ministers and central bank governors
- Ivey purchasing managers index for November 52.7 vs. 54.7 estimate
- BBC: We are not going to speculate on a last chance date, but ....
- The CHF is the strongest and the GBP is the weakest as NA traders enter for the day
In other markets:
- Spot gold moved for the away from the $1800 level on its way to a high of $1868.60. The pair is currently trading at $1865.25 up $26.39 or 1.44%. The low for the day reached $1822.51.
- Spot silver rose $0.38 or 1.59% to $24.57. The high price reached $24.78. The low extended to $23.52
- WTI crude oil futures had a volatile up and down day. It is currently trading at $45.69. That is down $0.56 or -1.21%. The high price reached $46.54. The low extended to $45.36
- Bitcoin on Coinbase is trading down $136 and $19,111. The pair currently trades between its 100 hour moving average at $19,137.06 and it's 200 hour moving average at $19,065.60. For a technical look at bitcoin click here. G7 finance ministers and central bankers got together and cited "strong support" on need to regulate digital currency's. The comments did not have a big effect on the price of bitcoin, but it might be a concern down the road
The economic calendar was lite today with Canada's Ivey purchasing managers index (weaker at 52.7 vs. 54.7 estimate) and US consumer credit (also coming in weaker than expectations), the only economic releases on the day. Traditionally, both are market movers, and that was case today.
What the market WAS focused on was the headlines coming out of Brexit negotiations. The clock is ticking with some suggesting that Wednesday is D-day for a deal or no deal.
The day started with a bearish view on Brexit deal prospects. As a result, NY traders were greeted with sharply lower GBP levels.
The GBPUSD and GBPJPY were both trading down identical -179 pips in the morning snap shot. However, after a headline that joint committee discussions were said to be progressing well, and that PM Johnson and von der Leyen would be meeting (via teleconference), the declines were whittled away.
Ultimately, the leader's talks broke down, with little progress being made on a 1. level playing field, 2. governance and 3. fisheries. As a result, the GBP moved back lower.
However, what has been the characteristic of the current trading environment for the pound, the price jumped higher again. This time the catalyst was word that PM Johnson would be going to Brussels to meet one-on-one, and face-to-face with his EU counterpart in a last ditch effort for a deal. So hope springs eternal and the GBP is down but not out.
Nevertheless, if you are going to trade the GBP now, be ready for volatile price action and uncertainty from random headlines.
Near the end of the day, the GBPUSD is trading down for the day, and is still the weakest of the majors (see the rankings above), but the -179 pip decline at the start of the North American session, is now only -61 pips (see chart below). For the GBPJPY, it's -179 pip decline earlier, has been reduced to -80 pips. The pound is down but not out as a glimmer of hope is still flickering.
The strongest currency of the day is the JPY as it overtook the CHF near the end of day. The CHF was the strongest for most of the day.
For other currency pairs vs the USD, they also had up and down price action and are trading mostly near mid-ranges, but with less high to low trading ranges (compared to the GBP pairs). The AUDUSD is trading up 19 pips. That is the biggest move from the closing levels on Friday. The other pairs are all within 14 pips of unchanged.
For the US stock market today, the NASDAQ closed at a another record high. The Dow industrial average close lower but did trade intraday to a new record high of 30233.03. The S&P index fell short of its all-time record high and close lower as well.
The final numbers are showing:
- S&P index -7.16 points or -0.19% to 3691.96
- Nasdaq index rose 55.713 points or 0.45% to 12519.94
- Dow fell 148.47 points or -0.49% to 30069.75.
In the US debt market today, the yields were lower across the board with a flatter yield curve. The 30 year fell by -5.48 basis points while the 10 year fell by -4.31 basis points.
