Summary:
- EURUSD surges above 1.21 to hit highest level since 1.21
- Breakthrough in German coalition talks boosts Euro
- USD fails to hold on to gains despite rise in core CPI
- US500 makes another all-time high
- Ripple gains after new partnership announced
The biggest story today comes in the EURUSD as the world’s most widely traded FX pair has made a break higher and moved above the 1.21 handle to trade at its highest level since 2014. A combination of a positive news flow for the Euro and a failure for the USD to gain despite upbeat news has seen the pair gain and a weekly close above 1.21 could be seen to pave the way for even more upside.
The most positive news today for the single currency came early on after a breakthrough in German coalition talks has paved the way for a grand coalition between Merkel’s Christina Democrat party and their closest rivals the SPD. The DE30 looks set to end the week lower after strong gains last time out but the market remains well above the lows seen at the start of the year.
Today’s CPI data was earmarked by some traders as a final hope for the US dollar and whilst the release wasn’t unequivocally positive it has provided some positivity. The headline reading of +0.1 M/M was in line with forecasts but the all important core figure rose more than expected to +0.3% from +0.1% previously. The US dollar initially rose on the news but it has subsequently fallen back and the USD index is threatening to fall below the 91 handle once more.
The release earlier this afternoon of the December retail sales and CPI figures caused a quick drop lower in stocks with the US500 dropping around 7 points. The market has subsequently recovered however and made a fresh all-time high. The major Bank’s kicked off the earnings season with mixed results with JP Morgan rising to its highest ever level after strong results but Wells Fargo pulled back after missing on revenue forecasts. Facebook has been hit today after the market reacted negatively to planned changes to its news feed.
In recent trade Ripple has decisively stole the show across the most traded digital currencies after announcing a partnership with Moneygram – the world’s second largest money transfer company. On top of that we had relative calmness without any hectic moves. Notice that Bitcoin (BTCUSD) is still trading below a $14k mark while a technical analysis seems to suggest that bulls could struggle to come back to the market in a more spectacular way.