Here is what you need to know on Friday, December 23:
Markets stay relatively calm early Friday as trading conditions remain subdued heading into the Christmas holiday. Germany’s Bundesbank will release its monthly report during the European trading hours. In the second half of the day, the US Bureau of Economic Analysis (BEA) will publish the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation, data for November. The University of Michigan’s final revision to the December Consumer Confidence Index, November New Home Sales and Durable Goods data will also be featured in the US economic docket before the long weekend. Stock markets in the US will operate at usual hours but bond markets will close one hour earlier than usual. Both markets will be closed on Monday, December 26.
On Thursday, the BEA revised the annualized Gross Domestic Product growth for the third quarter to 3.2% from 2.9% in the previous estimate. The upbeat data helped the US Dollar gather strength against its rivals in the American session. Additionally, Wall Street’s main indexes suffered heavy losses, helping the currency hold its ground as a safe haven. After having closed modestly higher on Thursday, the US Dollar Index moves sideways slightly below 104.50 in the European morning. The 10-year US Treasury bond yield extends its sideways grind at around 3.7% and US stock index futures trade little changed on the day.
EUR/USD registered small daily losses on Thursday but seems to have steadied slightly above 1.0600 early Friday.
GBP/USD dropped to its lowest level in more than three weeks below 1.2000 on Thursday as the risk-averse market environment weighed heavily on Pound Sterling. Following a late recovery, the pair managed to settle above 1.2000 on Friday.
USD/JPY closed virtually unchanged on Thursday near 132.50. The data from Japan showed earlier in the day that the National Consumer Price Index (CPI) in November edged higher to 3.8% in November, compared to the market expectation of 3.7%. This print, however, failed to trigger a noticeable reaction and the pair was last seen trading modestly higher on the day at 132.70.
Gold price declined sharply on Thursday on upbeat US growth data and closed below $1,800. XAU/USD recovers modestly early Friday but continues to trade below $1,800 for the time being.
Bitcoin struggles to find direction as it continues to move up and down in a narrow channel slightly below $17,000. Ethereum trades near $1,200 for the third straight day on Friday.