Ripple has raised concerns over potential volatility in its upcoming RLUSD stablecoin as pre-launch bids surge, signaling uncertainty ahead. Meanwhile, the global forex market showed mixed movement on December 17, with key data from the US, Canada, and the UK affecting market sentiment. The US Dollar Index (DXY) dipped slightly, while equities presented divergent performances, with the Dow posting an eighth consecutive drop and the Nasdaq achieving a new record high.
The day began with disappointing retail sales data from China, revealing that the Chinese consumer is still under significant pressure, with retail activity cooling further. This follows a trend of weakening domestic consumption, contributing to broader concerns about the pace of recovery in the world’s second-largest economy. As a result, market sentiment remained cautious, with risk-sensitive currencies such as the Australian dollar and New Zealand dollar showing weakness.
In the European session, the UK’s Services PMI surprised to the upside, rising to a three-month high of 58.5 points from 56.1, offering a boost to the British pound. This contrasted with a dip in UK manufacturing activity, which remained sluggish. Similarly, in the Eurozone, services data improved by moving out of contraction, but manufacturing continued to struggle, with further signs of stagnation.
The forex market saw mixed movement as the USD gained against the Japanese yen but weakened against risk-sensitive currencies. The US Dollar Index (DXY) closed slightly lower, falling by -0.11%, reflecting the broader market indecision. Meanwhile, US equity markets saw divergent performances: the Dow Jones Industrial Average dropped for the eighth consecutive session, extending its losing streak, while the Nasdaq surged to a new record high, driven by strong performances in the tech sector.
In the US, the Flash S&P Global PMI data presented a mixed outlook. While the Services PMI hit a 38-month high of 58.5, indicating strong growth in the services sector, the Manufacturing PMI dropped to 48.3, signaling contraction. Despite these mixed signals, inflationary pressures continued to ease, with price growth showing signs of moderation. These trends reinforced the market’s expectation that the Federal Reserve may consider a modest rate cut in its upcoming meeting.
Looking ahead, traders are focusing on several key economic reports. In the UK, the labor market data is set to show a projected decline of 12,000 jobs for the three months to October, following a sharp increase of 219,000 in the previous quarter. Despite this, the unemployment rate is expected to hold steady at 4.3%. Average earnings are forecasted to rise by 5.0% excluding bonuses, compared to 4.8% a year ago, while earnings including bonuses are anticipated to grow by 4.6%, up from 4.3%. This will likely not alter the Bank of England’s expectation to keep rates on hold unless there is a significant downside surprise, particularly in wage growth.
In Canada, the Consumer Price Index (CPI) year-over-year is expected to remain steady at 2.0%, with month-over-month inflation expected to rise by just 0.1%, compared to a previous 0.4%. The Trimmed-Mean CPI is forecasted to stay at 2.6%, while the Median CPI is expected to slightly decrease to 2.4%. The Bank of Canada has hinted that future rate cuts will depend on the continued moderation of inflation, with the possibility of 25-basis-point cuts in the coming months.
In the US, retail sales are projected to increase by 0.5% month-over-month, marking a slight acceleration from the previous quarter. Excluding autos, retail sales are expected to rise by 0.4%, up from a modest 0.1% increase last time. The Control Group’s sales are expected to rebound by 0.4%, recovering from the previous month’s decline of -0.1%. This data suggests that consumer spending remains resilient, supported by strong real wage growth and a healthy labor market. These factors, coupled with improving consumer sentiment, bode well for continued household spending in the US economy.
Gold prices saw a sharp rebound of over $20 yesterday, recovering from a significant $100 drop the week before. However, buyers encountered strong resistance near the November 25 highs of $2,725, with prices unable to break through key moving averages. The upward pressure was tempered by a solid US Services PMI report, signaling continued growth in December and adding downward pressure to gold.
As a result, gold reversed lower, closing the day around $2,650 after failing to surpass the 100-day simple moving average (SMA) barrier. The failure to break through these levels suggests that gold is currently trading within a range defined by the two major moving averages. The outlook for gold remains uncertain, with key economic data and central bank decisions expected to influence its future direction.
Market movements on December 17 were shaped by mixed economic data from China, Europe, the US, and Canada. While some sectors showed resilience, particularly in services, others, like manufacturing, continued to face headwinds. Forex markets reflected this uncertainty, with the US dollar seeing mixed performance across different pairs. Traders are now looking ahead to key reports, including UK labor market data, Canadian inflation, and US retail sales, to gain further insight into future economic trends. Meanwhile, gold continues to face resistance at key levels, with broader economic signals affecting its trajectory.
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