USD Rises after Christmas Holiday

The U.S. dollar index, which measures the Greenback’s strength against a basket of major currencies, rose yesterday. The Greenback fell slightly ahead of the Christmas holiday due to tight liquidity and a wave of correction, but soon surged to its highest levels in 14 years. 

The U.S. dollar index rose to 103, as the U.S. Consumer confidence jumped in December to the highest level since August 2001.

Gold prices rose as much as 1.5%, to settle at $1,150 yesterday, before declining to $1,144. Due to the lack of the U.S. economic data, the precious metal is unlikely to trade in a wide range and could decline to $1,140 or touch the bottoms of $1,122.

The Greenback rose to a ten-month high vs. JPY and touched ¥117.50. Technically, it could hit ¥118.65 before year-end.

Euro settled at $1.0450 as trading in some of the world's major financial markets resumed after the Christmas holidays. GBP fell to $1.2250 vs. USD due to renewed doubts about the consequences of leaving the EU and “harder Brexit” talks.

Oil prices traded at $54 per barrel yesterday, with support from anticipation of tighter supply once the first output cut agreement between non-OPEC and OPEC producers in 15 years takes effect on next Sunday. The deal will lower production by almost 1.8 million barrel per day (bpd).

The most important economic events:

  • USD MBA Mortgage Applications (DEC 23): (GMT: 14:00) – Medium
  • USD Pending Home Sales (YoY) (NOV): (GMT: 14:00) – Medium – Forecast () – Previous (0.2%).

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