Home Daily Commentaries USD starts week down on China reopening

USD starts week down on China reopening

Daily Currency Update

The USD is entering the week down against most majors as China announced a relaxation of “Covid zero” policies.  The USD lost in the Asian session and stayed down through European trading.  The USD/GBP pair especially seems overbought after the post-Truss correction.  The euro meanwhile made a 5 month high versus the USD and markets are still trying to find out what to make of Friday’s Non-Farm Payrolls beat ahead of the FOMC announcement on Dec. 14th.   Data for today includes the ISM Non-Manufacturing PMI, expected to slip from 54.4 to 53.3.

Key Movers

The euro hit a 5-month high as China relaxed Covid restrictions overnight bringing some risk appetite back in overnight trading.  We also saw oil up overnight despite OPEC+ announcing that they will hold to the already announced production cuts of 200,000 barrels less per day.  Some had been calling for additional cuts of 50,000 barrels to keep oil prices up.

Expected Ranges

  • EUR/USD: 1.0524 - 1.0591 ▲
  • GBP/USD: 1.2241 - 1.2343 ▲
  • AUD/USD: 0.6775 - 0.6849 ▲
  • USD/CAD: 1.3386 - 1.3473 ▼