Financial markets are again watching COVID cases climb and seeing the UK impose new restrictions. As a result, the safe haven dollar and Japanese yen are favored. Chinese property company Evergrande is declared in default reminding investors of problems in China’s massive property development market.
“It is better to sleep on things beforehand than lie awake about them afterwards”
December 9, 2021
EUR/USD 1.1302 GBP/USD 1.3199 USD/CAD 1.2695 AUD/USD 0.7153 USD/JPY 113.53 USD/CNH 6.3798 USD/ILS 3.1026 USD/MXN 20.9959 USD/CHF 0.9249 USD/INR 75.52 USD/BRL 5.5657 USD/SGD 1.3650 USD/DKK 6.5778 USD/SEK 9.0628 USD/NOK 9.0073
The US dollar gave back some of this morning’s gains despite Initial Jobless Claims coming in at 184K – the lowest since the 1960's and lower than the 215k expected. Continuing Claims were higher than expected at 1,992K (forecast 1,910K). Financial markets await tomorrow's CPI data where a reading of 6.8% YoY is expected to create nervousness – especially in Washington DC.GBP
The pound weakened on expectations the Bank of England will opt for caution at their meeting next week, despite recent data showing a strong labor market and firm wage growth. Boris Johnson advises the public that due to concerns over the new Omicron variant, Plan B will need to be initiated - citizens are now urged to work from home and use vaccine passports for large venues. It is reported the plan to curb the spread of the virus may cost the economy £2 billion a month.EUR
The euro weakened overnight during both Asian and European trading despite much better trade data than expected out of Germany. A support level at 1.1312 was found just at the 50-day moving average.CAD
The Canadian dollar is weaker this morning as the price of oil is down 1%. Yesterday’s Bank of Canada meeting did not result in any significant changes to the rate forecast. Markets still expect Canada to begin to raise rates before the US and to raise more aggressively as 2022 unfolds – thereby supporting the loonie.ASIA/PACIFIC
The Chinese renminbi weakened 0.50% after the People’s Bank of China set the daily fixing significantly higher. Also giant property developer Evergrande was officially declared in default casting a pall over risk assets.
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