ForexLive European FX news wrap: Dollar holds firm, US futures rise

Headlines:

• Euro, sterling in retreat mode to start the new year
• What will major central banks be up to in January?
• ICYMI: China has adjusted its yuan basket weightings for this year
• Eurozone November M3 money supply +3.8% vs +3.5% y/y expected
• Eurozone December final manufacturing PMI 45.1 vs 45.2 prelim
• UK December final manufacturing PMI 47.0 vs 47.3 prelim
• UK December Nationwide house prices +0.7% vs +0.1% m/m expected
• US MBA mortgage applications w.e. 27 December -12.6% vs -0.7% prior

Markets:

• AUD leads, GBP lags on the day
• European equities lower; S&P 500 futures up 0.8%
• US 10-year yields down 5.6 bps to 4.52%
• Gold up 0.8% to $2,644.13
• WTI crude up 1.5% to $72.79
• Bitcoin up 2.1% o $96,749

The dollar looks to be wanting to pick up from where it left off at the end of last year. That as we see European currencies stumble during the session. EUR/USD fell to its lowest since November as it drops to 1.0315 from 1.0370 earlier in the day. Meanwhile, GBP/USD is down 0.8% to its lowest levels since April in a fall to 1.2420 during the session.

The bond selloff has taken a pause but we’re still keeping with the momentum in FX to start the new year. 10-year yields in the US are down to 4.52% as bonds and equities are both staying more bid today. S&P 500 futures are up 0.8% as tech shares lead the charge, leaving European indices behind in the dust. The DAX is down 0.1% while CAC 40 is down 0.7% after a positive start earlier in the day.

Going back to major currencies, USD/JPY was more muted as it stuck around 157.00 while the antipodes were just a tad higher but lightly changed in terms of overall movement.

Elsewhere, gold is off to a decently hot start as well as it climbs to a two-week high of $2,644 while silver is trading back up above $29 after holding at the double bottom from the December lows around $28.80. Could this be the year where silver finally outperforms gold on the back of more industrial demand as well? We’ll see.

This article was written by Justin Low at www.forexlive.com.