Daily Currency Update

 Market commentaries will resume on January 2nd. Wishing everyone a joyous holiday season!

USD - US Dollar

Yesterday's sudden decline in stocks brought unexpected volatility as markets are winding down for the Christmas holidays. Asian and European stocks weakened after a roughly 1.5% fall in US equities, but US equity futures are showing some recovery, and the USD is slightly declining as market volatility subsides. Bond markets are weaker globally, with US 10-year yields rising 2-3 basis points so far. Today's data includes final US GDP revisions for Q3, expected to remain unchanged at 5.2% growth and 2.3% core GDP. Weekly claims might increase slightly, while December's regional Fed manufacturing surveys and November's leading indicators are anticipated to show continued softness.

CAD - Canadian Dollar

Stocks plunging late yesterday impacted the CAD's peak, but it has stabilized overnight and slightly recovered. The Bank of Canada's November policy meeting minutes didn't reveal new insights but reiterated caution regarding the rate outlook due to high wages and shelter costs. This week’s higher-than-expected CPI figures will likely reinforce the BoC's patient stance. October's Retail Sales are predicted to increase by 0.8%, reflecting the solid advance estimate from September's 0.6% rise. Strong Retail Sales data could boost the CAD in the short term, while the BoC's evident caution on rate changes may limit any significant downward pressure on the currency going forward. Observe USD/CAD trends.

EUR - Euro

ECB Vice President Guindos reinforced the message for markets to temper expectations this morning, stating that while there's a noticeable decrease in inflation, it's premature to discuss rate cuts. He pointed out that rising wages could postpone achieving price stability. Although EUR/USD maintained strong support around the low 1.09 range this morning.

GBP - British Pound

Sterling has seen a slight increase in its value during the session, despite not-so-favorable news from the UK, which mainly consisted of secondary data. The UK's government borrowing exceeded expectations, reaching GBP 14.3 billion in November, with an upward revision for October's figures. Additionally, the CBI's retail survey indicated much weaker than anticipated sales in December, hinting at a pullback in consumer spending leading into the holiday season.