The safe-haven greenback looks indecisive ahead of the New Year holiday despite the lack of risk demand
Wall Street stocks dripped overnight, pressured by renewed recession fears. The Dow Jones lost 1.1%, the S&P 500 fell 1.2%, and the Nasdaq Composite dropped 1.35%. On the data front, US pending home sales slipped 4.0% in November on a monthly basis versus the expected decline of 1.8%. Pending sales fell to the second lowest level on record, suggesting the economy is slowing. In individual stocks, Apple plunged to mid-2021 lows around $125 as the pressure intensified.
Following suit, Asian equity markets fell on Thursday, with MSCI’s broadest index of Asia-Pacific shares outside Japan down 1.06%, looking set for a third straight week of losses. Investors in the region were spooked by soaring COVID cases in China after the relaxation of stringent curbs. As a reminder, earlier this week, China announced it would end quarantine requirements for inbound travellers on January 8. Tokyo’s Nikkei 225 index lost 0.94%. The Hang Seng in Hong Kong shed 1.1%, while the Shanghai Composite was down 0.44%. The Kospi in Seoul sank nearly 2% on news that South Korea’s industrial production fell 3.7% from a year earlier in November.
Meanwhile, the US dollar struggles for direction, holding above 104.00 after the recent two-day bounce. The safe-haven greenback looks indecisive ahead of the New Year holiday despite the lack of risk demand in the financial markets. EURUSD failed to challenge the 1.0700 mark during the recent ascent, approaching the ascending 20-DMA that has been acting as support since early-November. Should this moving average give up, the short-term technical picture will deteriorate.
In other markets, bitcoin remains stuck in a relatively tight trading range, holding above $16,000 this month while struggling for direction since its rejection from December highs around $18,400. The largest cryptocurrency by market capitalization is little changed on Thursday after a two-day slide from local peaks seen just below the $17,000 handle earlier in the week. The coin now needs to validate the new uptrend by breaking the $18,400 resistance.