EUR/USD, EUR/JPY Rates Eyeing Euro-Area Inflation And PMI Figures

EUR/USD, EUR/JPY, Coronavirus Vaccine, European Lockdowns, Inflation – Talking Points:

  • Equity markets broadly gained during APAC trade as the rollout of several COVID-19 vaccines fuelled global growth bets.
  • The tightening of restrictions in several European nations may hamper the Euro’s climb against its haven-associated counterparts.
  • However, better-than-expected inflation and PMI figures could bolster the currency against USD and JPY. (FXE, UDN, FXY)

Asia-Pacific Recap

Equity markets broadly gained during Asia-Pacific trade as investors cheered the gradual rollout of several coronavirus vaccines and bet on a return to economic normality in 2021.

Australia’s ASX 200 index stormed 1.47% higher and Hong Kong’s Hang Seng index rose 0.7%, while China’s CSI 300 soared 1.25%. Japan’s Nikkei 225 failed to follow its regional counterparts higher, sliding 0.68% lower as Prime Minister Yoshide Suga stated he is considering declaring a state of emergency in Tokyo to stem a marked increase in COVID-19 infections.

In FX markets, the cyclically-sensitive Norwegian Krone largely outperformed alongside the Euro, as the haven-associated US Dollar continued to lose ground against its major counterparts. The second-most heavily traded cryptocurrency Ethereum extended its recent surge higher, climbing over 13% while Bitcoin hovered just shy of the $34,000 mark. (ETH-X, BITCOMP)

Gold and silver also benefited from the Greenback’s slide, gaining 1.3% and 2.83% respectively despite yields on US 10-year Treasuries pushing back above 0.94%. Looking ahead, a slew of PMI figures out of Europe and the US headline the economic docket alongside Brazil’s trade balance release for the month of December. (GLD, SLV)

EUR/USD, EUR/JPY Rates Eyeing Euro-Area Inflation and PMI Figures

Tightening Restrictions Could Limit Euro’s Upside

The Euro stormed higher against its haven-associated counterparts in 2020, climbing 3.4% and 8.8% respectively against the Japanese Yen and US Dollar. These gains look set to continue into the first quarter of 2021, as bullish technical setups begin to take shape across multiple different timeframes.

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