FX Today: It’s the Fed; nothing else matters

The US Dollar (USD) managed to add to Monday’s optimism as market participants geared up for the last FOMC event of the year on Wednesday. Firm data from the weekly ADP report and JOLTS readings also reinforced the bullish move in the Greenback.

Here’s what to watch on Wednesday, December 10:

The US Dollar (USD) flirted with five-day highs near 99.30, trading at shouting distance from its critical 200-day SMA while helped by the persistent recovery in US Treasury yields across the curve. The Fed interest rate decision will take centre stage, alongside the weekly MBA Mortgage Applications, the Employment Cost index, and the EIA’s weekly report on US crude oil stockpiles.

EUR/USD came under further pressure, down for the fourth day in a row and confronting its provisional 55-day SMA near 1.1600. Absent data releases, the focus of attention on the domestic calendar will likely be on speeches by the ECB’s Machado, Lagarde, and Donnery.

GBP/USD slipped back to four-day lows, breaking below the 1.3300 support following the better tone in the Greenback and despite hawkish remarks from BoE officials. Next on tap across the Channel will be the release of the RICS House Price Balance on December 11.

USD/JPY climbed markedly, hitting multi-day tops in levels just shy of the 157.00 barrier, extending the move higher for the third straight day. The key Reuters Tankan Index is due, seconded by Producer Prices.

AUD/USD rapidly faded Monday’s bearish price action and resumed its uptrend well north of 0.6600 the figure backed by the cautious stance from the RBA. Next of relevance in Oz will be the publication of the jobs report on December 11.

Prices of the American WTI dropped to multi-day lows, approaching the $58.00 mark per barrel as traders continued to closely follow developments on the Russia-Ukraine peace talks and the upcoming Fed meeting.

Gold prices hovered around the $4,200 region per troy ounce, up modestly for the day amid rising expectations ahead of the Fed gathering on Wednesday. Silver prices advanced further, this time exceeding the key $60.00 mark per ounce for the first time in history.