· The dollar took U.S. President Donald Trump’s impeachment in stride on Thursday while its Australian counterpart rallied after a surprise fall in the country’s unemployment rate.
The British pound GBP=D3 remained under pressure on renewed fears of a chaotic exit from the European Union. It was last at $1.3081 after sliding nearly 2% in as many days.
Dollar traders were sanguine after a majority of lawmakers in the U.S. House of Representatives voted to impeach Trump.
The dollar was a shade firmer against the safe haven yen JPY= at 109.56. An index that tracks the dollar against six major currencies hovered at 97.347, not far from a six-day high of 97.475 touched on Wednesday. .DXY
· “It is unlikely that the Senate will support the motion when it votes in January, as is required to remove Trump from office,” ANZ economists wrote in a note.
· The Aussie AUD=D3 climbed as high as $0.6883 after the robust jobs data suggested the country's labour market might have enough life in it to lessen the need for more interest rate cuts. It was last at $0.6878.
The euro EUR held close to Wednesday’s trough of $1.1109 against the dollar, shrugging off a better-than-expected survey of German business morale. It was last at $1.1126.
· USD/JPY keeps its range around 109.60 region, as the JPY bulls remain unimpressed by the BOJ's status-quo on its monetary policy. Meanwhile, markets also weigh in the news that the US House of Representatives impeached US President Trump.
The pair is at the upper end of this week’s range, still lacking directional momentum. In the 4-hour chart, the pair has managed to settle above a flat 20 SMA, while the larger moving averages maintain their upward slopes well below the shorter one. Technical indicators, in the meantime, remain flat but within positive levels.
Support levels: 109.20 108.90 108.60
Resistance levels: 109.75 110.00 110.40
· China’s finance ministry published on Thursday a new list of six products from the United States that will be exempt from tariffs starting Dec. 26.
The ministry said the exemption will be effective until Dec. 25, 2020. It did not elaborate on why it chose the products or the approximate value of imports of these goods.
The tariff waivers will be effective Dec. 26, and will apply for six items, most of them chemical products such as white oil, high-density polyethylene, linear low-density polyethylene, polypropylene and food-grade petroleum wax, the Ministry of Finance said.
· After the US House of Representative voted to impeach US President Trump, White House spokeswoman Stephanie Grisham said in a statement, President Trump is "confident the Senate will restore regular order, fairness, and due process".
· The Bank of Japan kept monetary settings steady on Thursday and maintained its upbeat view on the economy, suggesting policymakers are in no hurry to boost stimulus even as global risks threaten a fragile recovery.
But the central bank offered a gloomier view on factory output than at its previous rate review in October, a nod to the widening fallout from softening global demand and the U.S.-China trade war.
The Monetary Policy Committee of the Bank of England will issue its interest rate decision on Thursday December 19.
Forecast
The MPC is forecast to keep the official bank rate at 0.75% where it has been since August 2018. The vote is predicted to be 7-2 in favor of no change with two members, Michael Saunders and Jonathon Haskel, expected to vote for lower rates.
UK and Brexit, again
Rising concerns of economic and market turmoil around Prime Minister Boris Johnson’s EU exit plans have boosted the chances of a rate cut by the end of next year.
While no move is expected at this week’s meeting money markets in the UK have sharply increased the odds of a reduction to 76% on Wednesday from 30% last Friday.
· Sweden’s central bank hiked its benchmark repo rate by a quarter point to 0.0% as expected on Thursday, defying a slowdown in the economy and global uncertainty to draw a line under five years with negative interest rates.
· Oil prices remained atop three-month peaks on Thursday, extending a robust streak that began a week ago, as thawing trade relations between the United States and China supported global markets.
Brent crude futures edged up 8 cents to $66.25 a barrel by 0645 GMT, while U.S. West Texas Intermediate (WTI) crude gained 4 cents to $60.97. Trading volume was thin, with not even news of President Donald Trump’s impeachment by the U.S. House of Representatives stirring the oil market.
· WTI Technical Analysis: Buyers keep lurking around two-week-old rising trendline
Sustained trading beyond the short-term support trend line propels WTI towards flashing $60.90 as a quote by the press time of early Thursday. The energy benchmark recently flashed the fresh high since September.
While September month top, near $63.15, seems to be on the Bulls’ radar, May 20 low near $62.60 can act as an intermediate halt during the black gold’s further rise.
However, overbought conditions of 14-bar Relative Strength Index (RSI) raise hopes of a pullback towards adjacent support trend line stretched from December 03, at $60.60 now.
Should prices slip below $60.60, a fresh decline towards 23.6% Fibonacci retracement of the monthly run-up, at $59.70, can be expected.
In a case where energy sellers keep dominating after $59.70, 38.2% Fibonacci retracement and November 22 high close to $58.80/75 will be on their watch-list.
Reference: Reuters, CNBC, FXStreet
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