Should we keep an eye on the trend of European currencies, which are showing signs of strength?
28.12.2021
- U.S. S&P Case-Shiller Home Price Index
- U.S. 5-Year Treasury Auction
Yesterday, the three major U.S. stock indices all extended their gains, creating a risk-on market characterized by rising stocks, interest rates, and oil prices. Commodity markets saw broad gains across the board, including WTI crude oil, silver, and platinum, while the VIX (fear index) fell to 17.6. The cryptocurrency market was generally down, with BTC/USD trading around $49,188, down 3.5% from the previous day.
In the foreign exchange market, the pound saw a notable rise yesterday, with GBP/USD climbing more than 100 pips from 1.337 to 1.344. However, the pound edged lower against the euro, with EUR/GBP falling from 0.845 to 0.842. From a technical perspective, the key will be whether EUR/GBP breaks below its recent low of 0.841 with a solid candle.
There are no economic indicators scheduled for release during European trading hours today. However, once U.S. trading begins, the U.S. S&P/Case-Shiller Home Price Index is scheduled for 11:00 PM, the Richmond Fed Manufacturing Index at 12:00 AM, and the U.S. 5-year Treasury auction at 3:00 AM. As we enter the final week of 2021, we will carefully assess how currency strength and weakness may shift while forecasting price movements for the remaining three days of the year.
Author: Keisuke Sakurai
