FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
93,854,763Confirmed
2,009,343Deaths
67,029,564Recovered
Fetching Location Data…
Advertisement
Advertisement
Hussein Sayed
  • Asian equities mixed as US indices ended last week on record highs
  • USD closes 2019 near where it started
  • Gold rallies despite improved risk appetite

Easing trade worries and less Brexit uncertainty were the two key components of December’s equity rally and investors are continuing to enjoy some festive cheer in the final trading days of the year.

Asian stocks were mixed today after the S&P 500 and Dow Jones Industrial Average closed at new record highs on Friday. The decision by the People’s Bank of China to use the loan prime rate as the new benchmark for pricing floating rate loans helped push Chinese stocks higher, while Japan’s Nikkei and Australia’s ASX 200 traded slightly lower.

US dollar falls for third consecutive day

The Dollar seems to be out of love as we approach the new year. The Dollar Index has fallen by more than 1% from last week’s high and 2.9% from its 2019 peak, sending it closer to where it started the year.

High beta currencies were the main beneficiaries given the improved economic outlook, in particular the Australian and New Zealand Dollar which are holding near their 5-month highs. The Euro also built on Friday’s rally to trade above 1.12, while Sterling has gained more than 200 pips from last week’s lows.

As fears of a global recession have dissipated and the manufacturing cycle looks to be heading for a U-turn in the first half of 2020, expect to see some rotation from the US into emerging and European markets. If this scenario plays out, expect the Dollar to remain under pressure for the next couple of weeks.

Gold benefits from Dollar weakness

In a classic risk-on environment, gold prices tend to fall but not this time. The precious metal is trading at 2-month highs today, mainly driven by the weakness in the Greenback.

Another factor contributing to the rally in gold is the US airstrikes carried out in Iraq and Syria against Iranian-backed groups. If geopolitical tensions increase in the Middle East, there will be more reasons for investors to increase their allocation in gold, otherwise the gold rally makes little sense while equities are making record highs.

Oil traders are also keeping a close eye on developments in the region, although prices received a boost from steep declines in US crude stocks.

Given that we are in holiday season, expect to see some exaggerated moves in currencies and commodities. Flash crashes also can’t be ruled out when liquidity is thin.

Open your FXTM account today


Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US