USD – The greenback is little changed despite the upbeat December Conference Board Consumer Confidence data (64.5 in Dec vs MNI median at 59.0). Market continues to eye US stocks. More sizable stock gains would be deemed risk friendly, which is likely to underpin the euro and other currencies, rather than the USD.GBP – Like other pairs, plods along in a tight range ($1.5594 to $1.5679 overnight). Given that GBP has seen solid support below $1.5600 in recent sessions, the market is focused on a retest of Friday’s peaks around $1.5707. Beyond that, players will watch to see if cable can again break above its 55-day moving average ($1.5756 Tuesday) like it has on 3 occasions since late November. A close above the 55-day would be deemed bullish. Cable, currently at $1.5668, last closed above its 55-day in mid Nov.
GOLD – Feb COMEX gold remains under pressure, breaking away from firm crude oil prices and despite a lower US dollar index. The contract was recently down $6.90, under $1,600 at $1,599.80. Analysts are targeting near-term support at $1,574.20, the December low set on Dec. 14.
OIL – Crude prices ticking high on headlines (Reuters) that Iran’s first VP Reza Rahimi warned Tuesday that if the West imposes sanctions on Iran’s oil exports, “then even one drop of oil cannot flow from the Strait of Hormuz”. February NYMEX light sweet crude holds up $0.94 at $100.62, after trading in a $99.37 to $100.68 range. Crude has taken out the breakdown high of $100.33 from Dec 14, with an eye now on the fall peaks at $103.37, seen Nov 17.
US TSY – President Obama will certify to Congress by Friday that TSY is within $100b of the debt limit. That triggers a 15-day period ending Jan 14 in which Congress can deliver a joint resolution of disapproval. TSY official says they are not speculating what Congress will do or whether they’ll even take the vote, but in any event Obama would veto any resolution, thus giving TSY another $1.2 trillion in borrowing power. TSY ests that will last until about the end of 2012 whereupon TSY would begin about two months worth of extraordinary measures, taking the next debt limit battle into early 2013.
EasyForexNews Research Team