Last week, market movements centered around central bank policy expectations, with limited clear alternate influences. Comments from Fed officials and recent economic data suggest that Fed's tightening cycle is not over yet. This pushed US Treasury yields higher, but stock market indexes remained relatively stable. The steady market sentiment slightly restrained Dollar's rally momentum, leading to a mixed performance.
December 11, 2020
Daily FX Market Roundup December 11, 2020
Currencies were driven lower on Friday on fading hopes for Brexit and US stimulus deals. For most of this year, investors believed that the UK would eventually cave and agree to an orderly exit out of the European Union. However with only a few weeks before their deadline, the final round of Brexit talks are failing quickly with both sides preparing contingencies. In the US, lawmakers are expected to pass a one week spending bill to fund the government but the House has indicated that anything beyond that would require agreement to a broader fiscal stimulus plan. Unfortunately very little progress has been made and Senate Republicans say they do not have majority support for the current bill. If agreements cannot be reached in the next week or two, we could see sharp year end losses in currencies and equities.