Daily Currency Update

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US Dollar Index Up 0.5% Last Week

USD - United States Dollar

The U.S. dollar index rose over 0.5% last week, with the British Pound and Euro the main losers, dropping more than 2% and 0.40%, respectively. The Kiwi and Canadian dollar and the Japanese Yen traded almost flat while the Aussie managed to gain more than 0,.30% against the U.S. counterpart. U.S. economic data is not showing signs of deterioration: industrial production figures for November printed 1.1%, above the expected 0.8% and above last month’s print (-0.8%). U.S. GDP for the third quarter came in at 2.1%, in line with previous and consensus numbers. Personal Consumption Expenditures have not shown any green shoots, but they are also in line with expectations and the prior level of 1.5%.
The biggest news came from House Speaker Nancy Pelosi and the Democratic majority House of Representatives, which voted to impeach President Donald Trump, accusing him of misuse of power and obstruction of Congress. A trial is currently set to take place in the Senate in the New Year; however, given the Republican Party majority there, it is highly unlikely that the president will be removed from office when senators cast their votes.

Key Movers

Rising crude oil market optimism continues as the United States and China are moving in the right direction to curb their trade war. Crude oil prices topped out last Friday around mid-61 dollars per barrel. Crude has seen a lift in pricing as expectations for global demand are rising for 2020.
The Euphoria over U.K. Prime Minister Boris Johnson's landslide victory, which sent GBP to the highest close since March vs USD on Monday, quickly unraveled itself after he announced plans to set a Brexit deadline for December 2020. Given the recent movement in risk reversals, there is potential for further downside. The barometer of market positioning shows that the premium investors are willing to pay to bet that the currency will depreciate further tripled after the immediate aftermath of the U.K. general election vote.

Expected Ranges

EUR/USD: 1.1069 - 1.1089 ▲

GBP/USD: 1.2904 - 1.3032 ▲

USD/CAD: 1.3140 - 1.3173 ▲

AUD/USD: 0.6890 - 0.6929 ▲

NZD/USD: 0.6596 - 0.6628 ▲