The U.S. dollar is a touch stronger this morning with notable gains versus the beleaguered British pound.
Overview
Expect markets in general to slip into “holiday trading” fairly quickly this week, meaning less liquidity and perhaps no major movements.
Most markets, including the U.S. markets, will be closed Wednesday for the Christmas holiday. But much of the world will remain closed on Thursday including Europe, U.K., Switzerland, Australia, New Zealand and South Africa.
The dollar did weaken slightly in early trading after durable good orders disappointed. The total number of goods purchased in November decreased by 2.0%, missing estimates of a 1.5% rise. The so-called “core” reading that subtracts transportation registered as flat, missing forecasts of a slight 0.2% gain. New Home Sales are due out later this morning. There are no Fed speakers scheduled for the rest of the year.
What to Watch Today…
- New Home Sales at 10 a.m.
Complete Economic Calendar can be found here.
CAD
The Canadian dollar is under pressure this morning after a report showed that Gross Domestic Product underwhelmed. The economy shrank 0.1% on a month over month basis in October. On a yearly basis, the economy grew at a 1.2%, failing to meet estimates of 1.4%.
Despite today’s hiccup, the Canadian dollar is set to win the award of best performing G10 currency this year.
GBP
The British pound continues its downward slide and is now trading weaker than before the general election results shot the sterling higher last week. The pound sterling had its worst week since 2016 last week.
The pound’s weakness comes as emboldened Prime Minister Boris Johnson is pushing a piece of legislation that would prevent Parliament from extending the December 2020 deadline to get a trade deal with the European Union. As we have pointed out before, securing a trade deal as an outsider in under 12 months would be no small feat. We remain skeptical, hence, the sell-off in sterling.
