By Aine at Spark Global
12.22 (Tuesday) Foreign Exchange Analysis
The U.S. index rose sharply on Monday, and the US House of Representatives passed a 900 billion U.S. dollar rescue plan and a 1.4 trillion U.S. dollar government appropriation bill. The government appropriations will maintain the US government operations until next year. A new strain of the virus appeared in the UK over the weekend, and continued to ferment on Monday, and the market’s risk aversion once again fermented, pushing the U.S. dollar index to rise, and the British pound the euro to fall sharply against the U.S. dollar.
Fundamentals: The rapid spread of the new coronavirus strain in the UK worsened risk sentiment, and funds returned to the safe-haven dollar again. The situation at the center of the new round of the epidemic is superimposed on the lack of progress in the Brexit negotiations so far, which has also caused the market to maintain a sharp decline in optimism. Although investors are no longer worried about the faster spread of the new crown virus in the UK, the US non-US currencies rebounded sharply. With the Christmas and New Year holidays approaching and the market trading trend is sluggish, risk aversion is heating up, pushing investors’ funds to turn to the US dollar, and non-US currencies will take further downside. If the US fiscal agreement is further finalized and the external market risk factors remain unchanged, the dollar will go on a further upward trend.
Things to look out for today
15:00 Announcements, Final value of UK third quarter GDP annual rate Final value of UK third quarter quarterly rate and Germany January Gfk Consumer Confidence Index
21:30 The final value of the annualized quarterly rate of real GDP in the third quarter of the US The final value of the annualized quarterly rate of consumer spending in the third quarter of the United States and Final value of U.S. third quarter GDP deflator The final value of annualized quarterly rate of the third quarter core PCE price index
23:00 The Consumer Confidence Index of the Consultative Conference in the United States in December
The above strategy is for reference only, not as a basis for entering the market. Investment is risky and you must be cautious when entering the market.