As the financial markets wind down for the year, activity remains muted ahead of the New Year holiday. With no significant economic data scheduled for release, trading is expected to return to a more typical rhythm once investors resume their activities on Thursday.
Throughout December, the US Dollar (USD) has demonstrated robust strength against a range of major currencies. This month, the USD particularly outperformed the New Zealand Dollar. The performance has led to notable percentage gains, highlighting the greenback’s dominance in the currency market.
Recent economic indicators from the US revealed a 2.2% increase in Pending Home Sales for November, outpacing market expectations, which forecasted a more modest growth of 0.7%. This follows a solid 1.8% rise in October’s figures. In Asia, statistics from China indicated a slight expansion in manufacturing activity, with the NBS Manufacturing Purchasing Managers Index registering at 50.1 in December, while the NBS Non-Manufacturing PMI improved to 52.2 from the previous month’s 50.
The US Dollar Index remains steady near the 108.00 level and is positioned to finish the month with positive gains for the third consecutive time. Meanwhile, bond markets are set for an early close on New Year’s Eve, and US stock index futures are slightly lower, continuing the downward trend observed in major Wall Street indexes.
In the currency pair dynamics, EUR/USD struggled after peaking above 1.0450, closing lower on Monday and stabilizing around 1.0400 as Tuesday unfolds. Similarly, GBP/USD attempted to breach the 1.2600 level but could not maintain momentum, settling near the 1.2550 level.
gold prices dipped below $2,600, reaching their lowest in over a week, while it trades near $2,610 at the start of the European session. The USD/JPY pair also faced a downturn, dropping over 0.5% on Monday, with the pair currently hovering below 156.50, reversing a significant portion of gains from the previous week.
