The euro and the Swiss franc rallied against the US dollar in the early hours of the last trading day in Asia.
Surpassing the 1.0500 level triggered substantial algo orders and sent the EUR/USD up to 1.0653 from 1.0484 in a single move. Thin holiday volumes aggravated the quake. The EUR/USD consolidated between 1.0520/1.0550 following the spike. Given the nature of the price action, a further downside correction towards 1.0500/1.0475 could be expected.
In a similar way, the US dollar plunged to 1.0064 against the Swiss franc. Rapidly, the pair traded back towards the 1.0200 area. Yet, the shock left a negative weight on the USD/CHF’s shoulder before the end of the trading year.
Gold advanced to $1163 on the back of a further slide in US yields and a softer US dollar across the board. The positive momentum in gold could encourage a further upside correction. The key mid-term support stands at $1175 (major 61.8% retracement on Dec’15 to Jul’16 rise).
Oil and copper firmed, while iron ore came off its record quarterly advance.
The European stocks opened softer. It didn’t take long before all FTSE sectors turned into red.
Randgold Resources Ltd (NASDAQ:GOLD) (+0.62%) consolidated gains, while Fresnillo (LON:FRES) (-0.33%) paused after a two-day rally.
HSBC (NYSE:HSEA) (+0.43%) and Standard Chartered (LON:STAN) (+0.35%) were well bid, while Barclays (NYSE:BCS) (-0.40%) diverged negatively.
Energy stocks were on the back foot. BP (NYSE:BP) (-0.65%) and Royal Dutch Shell (NYSE:RDSa) (-0.56%) shred 5 points off the FTSE 100 at the open, on rising conviction that the OPEC and biggest allies may not be able to push the price of oil higher despite all efforts to cut the global production.
US stocks set for a firm open
US futures diverged positively from its UK and European peers in Asia. Dow Jones futures firmed 0.25%, as Nasdaq futures traded 0.33% higher.
US stocks are set to open on a positive note on the last trading day of 2016, while trading volumes are expected to thin into the yearly closing bell.
Dow Jones is called 40 points higher at 19859 at the US open, the S&P 500 is seen 5 points firmer at 2254.