(16 December 2020)DAILY MARKET BRIEF 2:All Eyes on Fed

(16 December 2020)DAILY MARKET BRIEF 2:All Eyes on Fed

16 December 2020, 12:26
Jiming Huang
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Oil prices are retreating on Wednesday on the back of the weekly report from the American Petroleum Institute, which showed an unexpected build of 1.973 million barrels last week, while analysts expected a 3.5-million-barrel draw. Investors are also concerned about the tighter restrictions imposed in many US states and European countries. Both WTI and Brent have lost over 0.20% so far.

Gold is bullish as investors focus on the progress on US relief package and the Fed’s upcoming interest rate decision. The COVID vaccine roll-out is also supporting hopes for a rapid economic recovery. The metal has gained 0.27% to $1,860.

In FX, the US dollar is bearish for a third session in a row, as interest in risk assets is boosted by optimism surrounding the COVID vaccine, Fed’s loose policy, and fresh stimulus. The USD Index is down 0.03% to 90.388 to update the lowest level since April 2018. EUR/USD is up 0.07% to 1.2160.

The sterling is correcting after a strong session on Tuesday, driven by reports that a Brexit deal was still possible. However, UK Prime Minister Boris Johnson reiterated that the most likely outcome was a no-deal divorce.

By Strategy Desk


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