In forex today, risk-based pairs drifted quietly higher, though overall markets remain tepid with pre-holiday volumes keeping action constrained near familiar levels.
Fears of a global growth slowdown and US-China trade tensions remain the key topics of discussion for market participants, and the US Dollar finds itself near the bottom of the barrel as rudderless US politics sees broader market sentiment remaining tumultuous beneath the surface.
The US Federal Reserve has drawn US President Donald Trump’s ire, as Trump’s own pick for the Federal Reserve chair continues to lift interest rates despite duplicitous tweets from the president demanding that the Fed stop raising rates too fast, to the point that Trump has been delivering rhetoric suggesting that he wants to find a way to fire the head of the Federal Reserve, leaving markets with a larrge questions mark and one foot squarely in safe-haven assets. Meanwhile, US Treasury Secretary Steven Mnuchin alerted market participants to the fact that he held high-level meetings with the heads of the US’ six largest banks, reassuring investors that there are no liquidity problems in the US markets, leaving traders concerned that there may actually be problems where previously they thought there were none as Mnuchin insists on addressing fears that nobody expressed.
EUR/USD seeking 1.4000 despite overly-cautious markets
The Euro is lifting into 1.1390 after opening Monday near 1.1370, and despite overall market tensions, risk appetite is leaning into the upside as the US Dollar takes a step lower on political frailties back home. European political turmoil is far from over in their own right, but EUR investors are seeing slim gains heading into the Christmas holiday shutdown.
GBP/USD knocking on resistance-heavy door just below 1.2700
Brexit wear and tear that has seen the Sterling hobbled for much of 2018 have been temporarily put on hold, but January looms dark and large ahead, with no-confidence votes, parliamentary withdrawal proposal votes, and a bleeding clock on the final Brexti date at the end of March 2019 all promising to keep UK markets under firm pressure. For now though, holiday markets see paper-thin volumes lifting the Cable above 1.2650 as the US Dollar withers across the board.
Key notes from the Asia session
China to remove iron export tariff from January 1st – China Finance Ministry
China’s NDRC to boost targeted investment – Bloomberg
US Treasury Sec Mnuchin: Convened meeting with six major bank CEOs
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