The European, U.S. markets are closed from the 24th December through the 26th for the holiday break. No key economic releases are expected over the week.
U.S. President Trump gave markets reasons to cheer on Saturday. He said the United States and China would “very shortly” sign their so-called Phase 1 trade pact.
Under the deal, the United States would agree to reduce some tariffs in exchange for a big jump in Chinese purchases of American farm products. China said on Monday it would lower tariffs on products.
Data published on Friday showed the U.S. economy, already enjoying a record expansion, appears to have maintained its moderate growth as the year ended, supported by a strong labor market.
Trading volumes are to weaken ahead of the holiday break, with investors taking profit on gains made earlier this month.
The EUR/USD posted slight losses erasing most of the gains seen a week earlier. Industrial production in the United States rose by 1.1% – more than expected – in November. Manufacturing PMI improved to 52.5 in December, just shy of the estimate of 52.6 pts. The week ended with Final GDP, which was unrevised at 2.1 percent.
GBP/USD suffered last week, having its worst week since October 2017. Weak British data weighed on the British pound sterling. The Bank of England held its monetary policy meeting last week, as widely expected, leaving interest rates unchanged at 0.75%
The AUD/USD enjoyed its best weekly close since late October, posting gains for a third successive week. Australia’s unemployment rate declined to 5.2% in November, beating estimates of a fall to 5.3%.
The Dollar/yen showed limited movement last week. Consumer prices in Japan showed a modest increase in November with core inflation rising 0.5%, up from 0.4% in October.
START TRADINGLQDFXperts – The week ahead: Getting ready for the holiday break
The only major data this week is the U.S. personal consumption expenditure (PCE) deflator for November, due on Friday.
With the economic calendar light before the holidays, analysts doubt this week will see significant moves for major currencies.
For the day:
- The euro held at $1.1078 after slipping 0.4% last week.
- Sterling last fetched $1.3011, not far from Friday’s three-week low of $1.2976. It slid 2.6% last week for its worst weekly showing since October 2017.
- The safe haven Japanese yen was treading water at 109.40.
- The dollar index barely changed at 97.667 against six major currencies.
- The Australian dollar, which is closely linked to sentiment towards China, rose 0.1% to $0.6913.
- The New Zealand dollar gained 0.2% to $0.6618.
- Spot gold was slightly ahead at $1,480.62 an ounce.
In commodities,
- Brent crude was off 21 cents at $65.93 a barrel, while West Texas Intermediate crude slipped 24 cents to $60.2 a barrel.
Follow this week’s economic calendar.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, CNBC, FX street