Forex Today: Stimulus passage fails to cheer markets amid covid strain concerns, Brexit eyed – FXStreet
Here is what you need to know on Tuesday, December 22:
The safe-haven dollar is rising as concerns about the fast-spreading COVID-19 strain weigh on sentiment. Congress passed the stimulus bill as expected. Hopes for a Brexit breakthrough keep the pound afloat. US growth figures and vaccine developments are eyed.
Coronavirus strain: The covid variant, which is discovered in Britain continues rattling markets, yet early Monday’s panic mode has gone. US stock markets recovered from their lows and the dollar pared some of its gains. The UK and France are likely to reopen freight movement between them after Paris’ decision to close the border caused major disruptions.
The mutation is somewhat 40-70% more transmissible than variants known beforehand, yet there is no evidence that it is vaccine-resistance. The European Medicines Agency approved the BioNTech/Pfizer vaccine and echoed the same notion. It is unclear if where else this variant is circulating, as not all countries perform robust genetic sequencing like Britain.
US stimulus: Congress completed the passage of the $900 stimulus bill and payments to the unemployed, small businesses, and others are set to roll out in the next few days. The legislation was part of a “catch-all” bill which also averts a government shutdown and passes additional decisions.
Markets had already priced in the deal which now awaits President Donald Trump’s signature. Gold, which initially jumped in response to the breakthrough, is steady on the lower ground around $1,875.
Brexit: The UK has reportedly made a considerable concession on fisheries, dropping its demand for an EU reduction of catches at UK waters from 60% to 35%, still apart from the bloc’s demand of 25%. The differences are minuscule in economic terms but politically sensitive. European fishery lobbyists feared that Chief EU Negotiator Michel Barnier is ceding too much ground.
The final read of US Gross Domestic Product figures for the third quarter is set to confirm the surge of 33.1% annualized in output. Existing Home Sales figures for November are forecast to show ongoing strength in the sector.
AUD/USD remains on the back foot despite upbeat preliminary retail sales figures for November.
As the Christmas holiday nears, liquidity is dropping and may cause higher volatility.
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