Summary:

  • European equities slightly decline
  • USD weakens further, EURUSD climbs towards its four-week high
  • Commodities continue their recent rally

The US dollar continued its slide during the European morning. In turn, EURUSD climbed to its four-week high putting some pressure on stock indices from the Old Continent. On the other hand, weaker USD helped keep the commodities rally still alive. However, fundamentals also played a role there. As far as cryptocurrencies are concerned, the sell-off resumed. 

The greenback is the weakest in three weeks following a drop in Treasury yields. The move could be justified by year-end rebalancing flows, although its scale has been exaggerated by the thin market condition. What’s more, the greenback is heading for its worst year in more in a decade. Overnight, AUD and NZD were in the lead but they have trimmed gains later. On the other hand, stronger EUR and JPY against USD have put pressure on European and Japanese stocks. 

European stocks have started Thursday session slightly lower despite a quite upbeat mood in Asia. However, note that the trading volume is light, thus the recent trends could not last beyond the end of this year. Moreover, the Santa rally, which usually takes place in the second half of December, has not occurred so far. After the noon German DAX (DE30) was sliding by 0.13%, French CAC40 (FRA40) was trading 0.05% lower, whilst Spanish Ibex (SPA35) and Italian FTSE MIB (ITA40) were losing respectively 0.46% and 0.26%. The UK FTSE100 (UK100) managed to post a gain of 0.18%. 

Copper has continued rally in the last days of 2017 amid lower trading volumes, weaker US dollar and upbeat reports from China that have pushed the metal prices towards the highest levels since 2014. The Chinese authorities urged the largest producers of the metal to halt the output to prevent environmental pollution during winter months. Moreover, copper has been on the rise this year due to improvement in demand and supply as these factors have also played in favour of higher prices despite the advance phase of the rally. 

Just as we thought that cryptocurrencies began to recover after a slump last week, another sell-off has stormed the market. One may say that it should be ascribed to end-year profit taking. However, the more likely reason behind this comes from South Korea, a country that by some measures is said to be responsible for over one-fifth of global trading in cryptocurrency market. This morning all major cryptocurrencies are in the red, with Dash (DSHUSD) being top-looser as it is sliding over 10% at present.

It’s going to be a relatively busy day as far as economic events are concerned. In the afternoon we get macro data from the US. However, these figures are not top-tier, hence they should not stop the recent USD weakness. A DoE report on crude inventories could be more important given oil prices hovering near their 2015 highs.