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27/12/2024 - 07:57 UTCThe U.S. dollar softened against a basket of major currencies on Thursday, with the Dollar Index sliding 0.12% on the day. Market participants are digesting signals from the Federal Reserve that it will maintain a cautious approach to interest rate cuts next year, emphasizing the fight against inflation remains a priority.
Trading volumes remain light as many traders are on holiday ahead of the New Year. Data released Thursday by the U.S. Department of Labor showed that weekly Initial Jobless Claims fell to their lowest level in a month. For the week ending December 21, the number of Americans filing new unemployment claims decreased to 219,000, down from 220,000 the previous week. This figure came in below the market expectation of 224,000.
In wall street, The US 30 edged up slightly on Thursday, marking its fourth consecutive session of gains despite subdued trading volumes and pressure from rising U.S. Treasury yields, which weighed on some leading technology megacaps. In contrast, the US Tech 100 and US 500 both ended the day marginally lower.
On the energy front, Oil prices edged lower on Thursday in light holiday trading, with Brent crude settling at $73.319 per barrel (-0.48%) and WTI at $69.709 per barrel (-0.79%). A stronger U.S. dollar weighed on prices, offsetting optimism over China's plans for fiscal stimulus to boost its economy. Additionally, U.S. crude inventories fell by 3.2 million barrels, according to the API, with official confirmation awaited from the EIA.
On the cryptos front, Bitcoin slipped on Thursday snapping a two-day winning streak as macroeconomic pressures and a TradingView glitch weighed on sentiment.
The cryptocurrency dipped further after a TradingView error temporarily showed Bitcoin’s market dominance at 0%, sparking volatility and leading to the liquidation of $33 million in long positions within hours. Despite the correction of the anomaly, the incident fueled sharp market reactions, dragging BTC/USD lower.
The EUR/USD rose on Thursday, as trading activity remained subdued with many market participants on holiday ahead of the New Year. Market attention now turns to the release of the preliminary US Goods Trade Balance data for November, scheduled for later in the day.
Thursday’s data from the US Department of Labor revealed that weekly Initial Jobless Claims fell to a one-month low. Across the Atlantic, European Central Bank (ECB) Governing Council member Boris Vujcic recently indicated that the ECB might consider further rate cuts if incoming data aligns with projections. The ECB has already reduced rates four times this year, bringing the deposit rate to 3.0%.
Gold prices edged higher on Thursday as ongoing geopolitical tensions and a weaker dollar bolstered demand for the safe-haven metal.
Heightened tensions in the Middle East supported bullion’s gains. Accusations between Palestinian militant group Hamas and Israel over alleged impediments to a potential ceasefire deal added to geopolitical uncertainties.
Hamas claimed that Israel imposed new conditions, while Israeli Prime Minister Benjamin Netanyahu accused Hamas of reneging on prior agreements. Gold, often viewed as a hedge against market volatility, gained traction amid the uncertainty.
Oil prices edged lower on Thursday after giving up initial gains driven by optimism over potential new stimulus measures from China, which could boost crude demand.
Earlier in the session, oil had extended its gains from Tuesday, buoyed by reports suggesting that China may implement significant fiscal measures to revitalize its economy.
Chinese authorities are reportedly preparing to issue a record 3 trillion yuan ($411 billion) in special treasury bonds in 2024, a bold fiscal move aimed at bolstering economic growth, according to sources cited by Reuters.
While optimism around China’s stimulus bolstered sentiment earlier in the week, traders remain cautious as concerns about global oversupply persist. Thin trading volumes are expected to continue through the remainder of the year, limiting significant price movements.
US stock index futures posted a mixed picture on Thursday with US 30 ending the session slightly higher while US 500 and US Tech 100 lost ground, as trading volumes remained subdued during the holiday-shortened week.
In the absence of major market catalysts, investors focused on the impact of rising US government bond yields. The benchmark 10-year Treasury yield climbed to 4.64% earlier in the session, its highest level since May.
Tech stocks faced downward pressure, with Tesla Inc. Sliding 1.8% and NVIDIA Corporation edging 0.2% lower. Alphabet Inc. and Arm Holdings also declined, with Arm falling 1.65%.
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