Let’s take a closer look at these and other important events that will affect prices of Currencies, Indices and Commodities with following key highlights:
- BoC mentioned possibility of rate hike next month.
- There are no surprises for Fed at its final meeting of 2021.
- BoE Governor Issues Warning to Crypto Assets
Vàng
Change for week: XAUUSD +0.89%
Fed did not surprise investors at its last meeting in 2021. The central bank confirmed gradual pace of decline along with at least three rate hikes over next year.
Meanwhile, XAUUSD climbed to a monthly high of 1,814.37. The yellow metal was up 3.5% in two trading days.
Surprisingly, US dollar strengthened, even though these assets often move in opposite directions. Investors continue to buy greenback as Omicron’s rapid spread continues due to uncertainty. By Friday, XAUUSD was down 1% and ended week at 1,797.35.
Forex
Change for week: EURUSD –0.72%, GBPUSD –0.19%, USDCAD +1.33%
ECB announced several inconsistent steps at its December meeting, leading to volatility in eurozone currencies. EURUSD ended Friday at 1.12357.
BoE opened an exchange rate race, raising benchmark from 0.1% to 0.25%. GBPUSD ended week flat at 1.32318 but with gains and losses of 1.5% each way.
BoC mentioned possibility of a rate hike next month. However, hawkish statement did not help Canadian Dollar strengthen. USDCAD rallied to multi-month highs and closed at 1.28900 on Friday.
Price increase pressure
USDCAD outperformed all majors by hitting 1.29383, highest level since August. Previous weakness in Canadian dollar was due to an increase in number of Omicron cases. This situation implies an inflow of money into safe-haven assets, a retreat from riskier currencies.
Downward pressure
ECB announced its monetary policy decision by ending tapering next March. EURUSD rallied to a monthly high of 1.33742. Central bank then specified that it would keep rates low and restart emergency assistance. EURUSD turned around and overcame a 1.50% drop thereafter.
GBPUSD spiked to a monthly high of 1.3357 following release of ratings. Next day, British officials introduced new social restrictions due to Omicron’s impact on economy. GBPUSD fell to 1.32318 and missed all previous gains.
Cryptocurrency
Change for week: BTCUSD –6.80%
BTCUSD is down 32.5% from its November all-time high of 69,095.24. This trading pair fixed closing price for week at 46,830.27.
Downward pressure
The pair was rejected due to potential new restrictions. BoE governor has issued a warning to crypto assets because central bank does not treat them as currencies in sense that is widely expected. After that, central bank of Russia joined anti-cryptocurrency campaign, not supporting its circulation in country. BTCUSD dipped below 45,500 on news.
