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USD remains under pressure, Ripple continues winning streak

Summary:

  • European stocks welcome new year with declines

  • US dollar continues its losing streak

  • Manufacturing PMI prints in the spotlight

First trading day of 2018 began with significant gains posted by Chinese benchmarks during Asian session. USD continues to slide lower being the weakest currency in G10 basket so far. Gold price has hit 3-months high supported by the weakness of the US currency. Potential supply disruptions caused by protests in Iran support oil prices sending them higher to the levels last seen in mid-2015.

Red is the color dominating the European opening as the upbeat mood from Asia failed to spread throughout the Europe. Stronger euro is the main factor that weighs on the benchmarks from the Old Continent. So far banks are top-gainers thanks to increased yields.

Even though the cryptocurrencies are highly speculative financial instruments they could have contributed to Japanese economic growth in the past quarter and the whole year as well. According to calculations carried out by Nomura analysts a so-called Bitcoin wealth effect could amount to 96 billion JPY adding 0.3pp to GDP in a quarterly basis and 0.07pp in terms of a year-over-year basis.

Financial markets have already entered the new year, however the US dollar which had its worst year in more than a decade, does not seem to be out of the woods. The US currency began 2018 with a drop against all major currencies in the G10 basket except the JPY. Over the course of the recent days we had some data from the Chinese economy which could have helped the Antipodean currencies commence the year better.

The British pound barely changed following manufacturing PMI for December even as it missed the economists’ estimate. The index came in at 56.3 against the consensus placed at 57.9 and even as it was a slide compared to 58.2 seen in November the pace of expansion left the quarterly average at the highest level since early 2014.

In today’s economic calendar we still have one more important figure scheduled for release and that is Canadian manufacturing PMI print for December. The Germany and Eurozone PMI releases came in line with forecasts. Other top-tier prints scheduled for this week concern European inflation as well as US and Canadian labour market.

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