The euro extended the rally to levels just below 1.2300
In choppy trading on Tuesday, Wall Street stocks fell from fresh all-time highs as investors proceeded to profit-taking. The legislation that would increase the payments to $2,000 faced uncertainty in the Republican-controlled Senate after Majority Leader Mitch McConnell blocked a vote in the upper house. On the data front, the S&P Case-Shiller home price index for October rose 7.9%, the fastest pace in six years. As a result, the S&P 500 fell 0.22%, the Dow Jones dropped 0.22%, and the tech-heavy Nasdaq slid 0.4%.
Asian markets were mixed on Wednesday, with Japan’s Nikkei 225 retreating from a 30-year high while stocks in Hong Kong, Seoul, and Shanghai rose. Hong Kong’s Hang Seng jumped 2.18%, the Shanghai Composite index in China gained 1.05%, and South Korea’s Kospi added 1.88%. Japan’s Nikkei share average lost 0.45% on its last trading day of 2020.
In Europe, equities turned positive after a flat-to-lower opening, as investors have already digested a deal between the UK and the EU. The pan-European Stoxx 600 index climbed 0.13% at the time of writing. London’s FTSE 100 index gained 0.19% after the coronavirus vaccine developed by the University of Oxford and AstraZeneca was authorized for emergency use in the U.K.
Meanwhile, the dollar kept losing ground versus most counterparts, with EURUSD climbing to fresh April 2018 highs above 1.2270 before retreating slightly on Tuesday. Today, the euro extended the rally to levels just below 1.2300. USD weakness remains the main factor driving the common currency higher. Upbeat market mood sent the dollar index to fresh lows below the 90.00 handle amid relatively thin liquidity conditions. In the longer term, EURUSD could add to gains amid the economic recovery from the pandemic crisis and the Federal Reserve’s dovish monetary policy.
In other markets, oil prices continued to tread water in a tight trading range above the $50 key handle on Tuesday. Brent crude gained modestly but failed to challenge the $52 barrier as traders turned cautious in thin trading conditions. On the positive side, the futures continue to hold above the ascending 20-DMA that has been acting as support for nearly two months already. In the short-term, Brent could retreat marginally amid profit-taking ahead of the New Year’s holiday.