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Dollar Softens after Trump Signed Pandemic Relief Bill, Sterling Mildly High on Brexit Trade Deal

Dollar, Yen and Swiss Franc are the relatively weaker ones in quiet markets today. Asian investors are lifted slightly after US President Donald Trump signed the massive USD 2.3T package that contains a USD 900B pandemic relief, while also averted government shutdown. Sterling and Euro are the firmer ones after the long-awaited Brexit trade deal was reached late last week. Nevertheless, there has been no clear breakout in the markets so far. Trading could remain subdued and consolidative in this holiday-shortened week.

Technically, developments in EUR/USD and GBP/USD would worth a watch this week. Break of 1.2272 resistance in EUR/USD would resume larger up trend for 1.2452 projection level next. Similarly, break of 1.3624 in GBP/USD would resume larger rise towards to 1.3956 projection level. Gold is a guide on Dollar’s move too and break of 1906.74 resistance will resume the rebound from 1764.31. That lead the break of above mentioned resistance level in EUR/USD and GBP/USD.

In Asia, currently, Nikkei is up 0.65%. Hong Kong HSI is flat. China Shanghai SSE is up 0.30%. Singapore Strait Times is up 0.25%. Japan 10-year JGB yield is up 0.0004 at 0.020.

GBP/CHF upside capped despite last minute Brexit trade deal

Sterling is so far having very little reaction to the last minute trade deal between the UK and EU. Overall outlook is mixed for now. Details were published in a 1246-page document titled “Draft EU-UK Trade and Cooperation Agreement“. European Parliament is expected to meet today to discuss the agreement, while the UK Parliament will vote on December 30.

GBP/CHF staged a strong rebound last week but upside is capped below 1.2203/59 resistance zone. Range trading could still continue between 1.1598/2259 for the near term. Resumption of rebound from 1.1102 is now mildly in favor. Firm break of 1.2259 woul