Posted at 27 December 2024 / Categories Market Roundups
Market Roundup
•Japan Housing Starts (YoY) (Nov) -1.8%, -0.1% forecast, -2.9% previous
Looking Ahead Economic (GMT)
• 08:00 Spanish Retail Sales (YoY) (Nov) 2.8% forecast, 3.5% previous
Looking Ahead Events and Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro slipped lower against the dollar on Friday as greenback stayed on the front foot as markets awaited signals on the U.S. economy under the incoming Trump administration and the Federal Reserve's interest rate strategy for 2025. As Donald Trump prepares to return to the White House in January, markets will be closely monitoring U.S. economic data to gauge how the Fed will navigate inflationary pressures anticipated from his administration's policies, including tariffs, deregulation and tax reforms.After aggressively cutting rates in September and November, the Fed persisted with easing in December but hinted at fewer reductions in 2025. Immediate resistance can be seen at 1.0399(38.2%fib), an upside break can trigger rise towards 1.0438(50%fib).On the downside, immediate support is seen at 1.0346(23.6%fib), a break below could take the pair towards 1.0300(Psychological level)
GBP/USD: The pound dipped on Friday as dollar was buoyed by Fed signals for slow pace of easing in 2025. With only a handful of trading days remaining in the year, investor focus has switched to 2025, with the Fed's policy path, the incoming Trump administration and its tariff-related policies and geopolitical worries in the spotlight.The Fed jolted markets earlier this month as it lowered rates by 25 basis points but projected just two rate cuts next year, down from four it had projected in September. Traders are pricing in 37 bps of easing next year with the next cut fully priced in for June. Immediate resistance can be seen at 1.2579(Dec 23rd high), an upside break can trigger rise towards 1.2637(Dec 38.2%fib).On the downside, immediate support is seen at 1.2503(23.6%fib), a break below could take the pair towards 1.2466(Lower BB)
AUD/USD: AUD/USD remained near a two-year low on Friday as RBA-Fed rate divergence , weak Chinese economy weighed on Australian dollar. Earlier this month, the Reserve Bank of Australia signaled the possibility of a near-term rate cut. The dovish tone, alongside the Fed's cautious stance on rate cuts, weighed on the Aussie, already impacted by risk aversion and concerns over China's economy At 07:19 GMT, the Australian dollar was down 0.06% at 0.6217 against the greenback. Immediate resistance can be seen at 0.6279(38.2%fib), an upside break can trigger rise towards 0.6339(50%fib).On the downside, immediate support is seen at 0.6190(23.6%fib), a break below could take the pair towards 0.6160(Lower BB)
USD/JPY: The dollar hovered near a five-month high on Friday as BOJ's cautious stance weighed on Japanese yen. A summary of opinions from the BOJ's December policy meeting released on Friday showed some officials becoming more confident about a near-term rate increase, while others remained wary amid uncertainties over the trend for wages and the policies of U.S. President-elect Donald Trump's incoming administration. Japan's currency got little respite from a fresh warning from the country's finance minister that the government has been alarmed by foreign exchange developments and will take appropriate action against excessive moves. Immediate resistance can be seen at 158.02 (23.6%fib) an upside break can trigger rise towards 158.88(Higher BB). On the downside, immediate support is seen at 157.22(Daily low) a break below could take the pair towards 157.00 (Psychological level).
Equities Recap
Asian stocks edged higher on Friday as investors focused on 2025, anticipating a cautious approach to rate cuts by the Federal Reserve.
Hang Seng was up 0.10% , and South Korea's KOSPI was down by 1.02%. Nikkei was up 1.77
Commodities Recap
Gold prices remained range-bound on Friday after hitting a one-week high in the previous session, as geopolitical tensions fueled safe-haven demand, putting the metal on track for a modest weekly gain.
Spot gold was little changed at $2,635.83 per ounce, as of 0622 GMT, trading in a narrow $8 range. Gold has gained about 0.6% so far this week after prices hit their highest since Dec. 18 in the last session.
Oil prices were little changed on Friday but were set for a weekly rise amid optimism that economic stimulus efforts will prompt a recovery in China, but a stronger dollar capped gains.
Brent crude futures fell 2 cents to $73.24 a barrel by 0535 GMT. U.S. West Texas Intermediate crude was at $69.61, down 1 cent, from Thursday's close. However, on a weekly basis, Brent was up 0.4% and WTI rose 0.2%.