Dollar Broadly Under Pressure ahead of Jobless Claims Numbers
The US currency remained broadly weaker versus other major currencies in thin trading ahead of New Year celebrations. Commodity currencies maintained their positive momentum as oil and other metals remained on the rise. Major European blue-chip indices were not much changed around midday. The pan-European Stoxx 600 was roughly flat, with basic materials outperforming on the back of rising commodity prices and technology once again coming under pressure; tech stocks were the worst performers within the Stoxx 600. The blue-chip Euro Stoxx 50 was down by 0.2%. Meanwhile, the UK's FTSE 100 was 0.1% up and not far below yesterday's all-time high, while the German DAX was down by 0.2% and the French CAC 40 traded lower by 0.05%. Dow, S&P 500 and Nasdaq 100 futures traded up by 0.15%, 0.1% and 0.2% respectively.
Ahead of the EIA weekly report, WTI and Brent crude were up by 0.2% and less than 0.1%, at $59.71 and $66.47 a barrel respectively. They both traded close to2-½-year high levels reached earlier in the week. Gold was 0.4% up at $1,291.83 per ounce after rising to as high as $1,293.25, this being a one-month high for the precious metal which has been benefitting on dollar weakness. Copper futures rose to touch their highest since early 2014.
Ten-year Treasury yields have recovered somewhat during today's trading after falling sharply in the two days that preceded, though they still stand at a distance to last week's nine-month high of 2.5040%. They were last at 2.4341%. The decline in long-term yields is rendering the US currency less attractive relative to counterparts, while it was not associated with a fall in short-term yields, leading to yield curve flattening and once again fueling the debate on what that could mean for the economy further ahead. Dollar/yen was 0.4% down at 112.83 after falling to a nine-day low of 112.65 earlier in the day.
The rally in metals kept supporting the aussie, while the kiwi rose in sympathy as well. Aussie/dollar and kiwi/dollar were up by 0.2% and 0.35% respectively. Both pairs recorded two-month highs earlier in the day, with aussie/dollar touching 0.7809 and kiwi/dollar hitting 0.7098.
Higher oil prices as well as rising expectations for another interest rate hike to be delivered by the Bank of Canada when it completes its meeting on monetary policy on January 17 have been supporting the Canadian dollar. Dollar/loonie was 0.4% down, trading close to 1.2601, this being its lowest since October 20 recorded earlier in the day.