Wednesday 23 December 2020
In what looks like a final hurrah outgoing US President Trump has thrown a spanner in the stimulus package works by threatening to refuse to sign it. He has sent it back to Congress and told them to raise the personal stimulus amounts to $2k from $600 and remove "unnecessary" spending. US government will shut down on 29 Dec if Trump does not sign the bill. Cue some softer risk sentiment and negative USD flows with year-end position squaring still going through as well.
Brexit continues to grab headlines, mostly of the huff and puff variety, but with signs that a deal-lite may yet be struck before 31 Dec but with plenty of provisos/transition as I have long warned. Travel has resumed between France and the UK but there's a massive backlog of lorries to reduce over the next few days.COVID also continues to cast its sad shadow both in the UK, with reports of further clampdowns from 26 Dec in England, and around the globe.
GBPUSD had another rollercoaster ride but held decent support into 1.3300 before breaking up through the pivotal 1.3360 area to test 1.3440-45 again. I hope my tweets gave you a steer again. EURGBP enjoyed another rally to test 0.9160 (GBPEUR down to 1.0917) this time but those offers capping back and back down to 0.9080 (1.1013). GBPJPY found support at 138.00 this time around but finding a cap into 139.50 again on the softer risk.
Patience continues to be a virtue and rally-selling in GBPUSD bringing reward again but entry level key as always. Definitely will continue to see some dip demand as the negatives get factored in so equally may be a case for going long in the dips too but not my preference. Brexit still the large elephant in the room and now COVID once again stealing headlines too, and some.
USDJPY failed into 103.80 again and now 103.35 as softer USD tones returned and with JPY demand notable on the softer risk plays.EURJPY has 126.60 still providing a decent cap amid softer risk plays but equally 126.00 providing support. EURUSD tested 1.2250 again in a steady line only to run out of puff yet again as some USD demand returned and those 1.2200 option expiries proved a little magnetic but holding 1.2150 again. USDCHF capped a little lower above 0.8900 this time but now held around 0.8875 on the retreat amid mixed USD tones and EURCHF underpinned still with the SNB ever watchful and EURUSD ranging.
AUDUSD has found a base at 0.7520 but equally can't get through 0.7580 with some AUDJPY supply helping to cap.USDCAD held 1.2850 and had a decent return journey up to 1.2930 but now testing 1.2875 on softer USD tones/ furmer oil combo.
I will be sending out my update tomorrow (24th) then taking a break and back on Wednesday 30th. For those who may be finishing today may I wish you a peaceful festive season and we look forward to being of ongoing assistance in a better 2021.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.45 GMT
GBPUSD 1.3422
EURUSD 1.2192
EURGBP 0.9089
GBPEUR 1.1004
GBPAUD 1.7732
GBPCAD 1.7280
GBPJPY 138.77
GBPZAR 19.5998
GBPHKD 10.4045
USDJPY 103.41
USDZAR 14.5887
EURJPY 126.08
EURCHF 1.0841
EURHKD 9.4552
AUDUSD 0.7557
USDCAD 1.2878
USDCHF 0.8887
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