The foreign exchange market is likely to revive after Christmas, but trading activity will still be sluggish. Trade optimism remains the major driving force, whetting traders’ appetite for risky assets. The US currency as a safe-haven asset is of little interest to the market participants. The US dollar is losing ground across the board. Traders are hoping for the US-China trade deal and therefore selling safe-haven currencies. Such a macroeconomic situation exerts downward pressure on the US dollar. The greenback has been losing ground since the beginning of the week. The currency opened the trading session at the level of 97.15. The American dollar suffers the greatest losses against the pound, which has inched up by 0.7% today. Over the week, the pound/dollar pair has surged by 0.5%. The euro is also gaining momentum amid the weak US dollar. On Thursday, the single currency showed a slight increase, while today the pair is steadily extending gains.
Today’s economic calendar is bereft of any important releases. However, taking into account Christmas, it can be seen that the fluctuations of the main currency pairs have not been triggered by any fundamental news. Today, official data on US crude oil inventories is set to be released. Amid this news, oil prices are expected to grow if the American Petroleum Institute's report on a significant reduction in oil reserves is confirmed. This fact is likely to support the British currency which depends on oil.
The Canadian dollar managed to gain ground amid the weak US currency. The USD/CAD pair moved to the area of the 30th figure, having reached the level of 1.3080. The loonie is also supported by higher oil prices. Today, Brent is testing its 3-month high. Since the beginning of the year, the benchmark has advanced by over a quarter.
Given that most of the global trading sessions were closed on holidays, and the fact that market volatility is traditionally low during the period between Christmas and the New Year, a number of safe-haven assets is expected to lose ground next week.
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