Americas Roundup: Dollar Gains Against Commodity Currencies on Oil Weakness, US Shares Decline -December 31st,2015

Market Roundup

  • US November pending home sales fall 0.9 percent, Northeast & West fall most.
  • US weekly crude stocks rise +2.63mio vs 2.5mio forecast -EIA.
  • USD share of global FX reserves edges up to 64 percent-IMF data.
  • Crude falls to 11-yr low on US stock build; IMF warns of “disappointing” 2016 econ growth.
  • ECB’s Constancio hopes negative rates are temporary & not a permanent feature of normal monetary policy.
  • Global equities pushed down by weak commodity prices.
  • Saudi Arabia says no change in oil policy, ready to meet demand-WSJ.
  • Brazil repays debt to state banks run up in Rousseff’s first term, ends ‘backpedaling’.
  • China suspends forex business for some foreign banks; Move comes amid growing spread between onshore, offshore yuan.

Looking Ahead – Economic Data (GMT)

  • No Significant Data

Looking Ahead – Events, Other Releases (GMT)

  • No Significant Events

Currency SummariesEUR/USD is likely to find support at 1.0871 levels and currently trading at 1.0931 levels. The pair has made session high at 1.0938 and hit lows at 1.0901 levels. euro declined against dollar on Wednesday  after single currency came under pressure from a strengthening dollar, even though the volumes in markets were thin due to holiday season. Traders who had bet against the euro for much of this year on the view that lower interest rates in the euro zone compared with the United States would weigh on the currency reversed those bets, which buoyed the euro and kept it mostly weak against the dollar. The U.S. dollar index, which measures the greenback against a basket of six major rivals, was last up 0.23 percent at 98., The euro slightly weakened against the greenback at $1.0911. To the upside, immediate resistance can be seen at 1.0940. To the downside, major support level is located at 1.0897 levels.USD/JPY is supported around 120.00 levels and currently trading at 121.50 levels. It hit session high at 120.63 and made session lows at 120.43 levels. US dollar edged higher against Japanese yen on Wednesday, Following the view that the central bank would resort to gradual increases in , the U.S. dollar rallied against commodity currencies such as the Norwegian crown and Russian ruble on Wednesday after declining oil prices weighed on the currencies of oil-dependent economies. On the data front, pending homes sales fell in November for the third time in four months, a signal that growth in the U.S. housing market could be cooling. The National Association of Realtors (NAR) said on Wednesday its pending home sales index slipped 0.9 percent to 106.9. The NAR said the index rose slightly more in October than initially estimated. The dollar was last up 0.06 percent against the yen at 120.540. The dollar was last down 0.31 percent against the Swiss franc at 0.99010 franc.USD/CAD is supported at 1.3833 levels and is trading at 1.3883levels. It has made session high at 1.3893 and lows at 1.3873 levels. The Canadian dollar declined against its U.S. dollar on Wednesday, after falling crude oil prices weighted on Canadian dollar although it is maintaining recent holding pattern ahead of the New Year’s Day holiday on Friday. Crude oil prices retreated as indications of slowing global energy demand bumped up against record-high inventories. The slump in oil prices weighed on risk appetite, providing an additional headwind for commodity linked currencies. The currency’s strongest level of the session was C$1.3830, while its weakest level was C$1.3916. It hit its weakest level in more than 11-years on Dec. 18 at C$1.4003. To the upside, immediate resistance can be seen at 1.3900. To the downside, major support level is located at 1.3813 levels.NZD/USD is supported around 0.6823 levels and currently trading at 0.6843 levels. It hit session high at 0.6850 and made session lows at 0.6828 levels. The New Zealand dollars stood tall on Wednesday buoyed by rallies in equities led the currency pair to make hefty gains against the dollar. The New Zealand dollar stole the show at $0.6865, having climbed to a 10-week peak of $0.6881 overnight. Resistance was found at $0.69. Also helping was a signal from the Reserve Bank of New Zealand that it was ready to pause easing after it cut interest rates earlier this month. New Zealand government bonds were mixed on Wednesday, with yields down 0.5 bps at the short end and up 1.5 bps at the long end. To the upside, immediate resistance can be seen at 0.6852. To the downside, major support level is located at 0.6810 levels.Equities RecapEuropean stock markets fell on Wednesday as weak commodity prices hit the shares of mining and energy companies.UK’s benchmark FTSE 100 closed down 0.6, Germany’s Dax ended down by 1.1 percent, France’s CAC finished the day down by 0.3 percent, and Europe’s FTSEurofirst 300 provisionally closes down 0.5 percent.Wall Street fell on Wednesday as Brent crude slid towards 11-year lows and Apple weighed on the S&P 500 index, which clung to a meager gain for 2015.Dow Jones closed down by 0.66 percent, S&P 500 ended down by 0.73 percent, Nasdaq finished the day down by 0.83 percent.Treasuries Recap U.S. Treasuries prices were mixed on Wednesday in thin and choppy year-end trading ahead of a seven-year note auction by the Treasury and as oil retreated.Benchmark 10-year U.S. Treasury notes were last down 1/32 in price to yield 2.310 percent, up from 2.307 percent late on Tuesday.The U.S. 30-year bond was last down 5/32 in price to yield 3.049 percent, up from 3.041 percentCommodities RecapCrude prices fell more than 3 percent on Wednesday, with prices falling back towards  11-year lows, after an unusual build in U.S. stockpiles and signs Saudi Arabia will keep adding to the global oil glut.Brent, the global oil benchmark, settled down $1.33, or 3.5 percent, at $36.46 a barrel. Its session low was $36.35, less than 40 cents from a 11-year bottom struck last week.WTI finished the session down $1.27, or 3.4 percent, at $36.60. Gold fell on Wednesday, as the combination of a firm dollar and weak oil prices left the metal on track for its third consecutive annual loss.Spot gold dipped 0.8 percent to $1,060.10 an ounce by 2:38 p.m. EST (1938) GMT, while U.S. gold futures settled down $8.20 an ounce at $1,059.80. Trading volumes were muted in the holiday-shortened week.

The material has been provided by InstaForex Company –