Article Highlights

  • US vehicle sales clocks in at 16.8M vs. 16.9M expected in December, 17.2M in November
  • S&P 500 drops by 1.8% as crude oil dips below $50 for the first time since April 2009
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Thanks to risk aversion, trading volatility remained interesting for forex traders during the U.S. trading session.

European currencies like the euro and pound found breathers after losing heavily in the earlier trading sessions. In case you missed the headlines, the common currency is possibly facing a Grexit as well as a massive QE by the ECB while the pound has also been taking hits against its counterparts.

EUR/USD hit a session high of 1.1941 before closing with a 38-pip gain to 1.1937, EUR/GBP inched 6 pips higher to .7826, and GBP/USD climbed 39 pips to 1.5253.

What caught the market players’ attention more was WTI crude falling below $50 for the first time since April 2009 while Brent crude oil also hit $53, a new multi-year low. The news inspired risk aversion and dragged U.S. equities with it while boosting popular safe havens such as yen and gold.

Yen crosses took hits across the board with USD/JPY leading the pack with a 52-pip drop to 119.65 while EUR/JPY slipped by 15 pips to 142.83 and GBP/JPY fell by 31 pips to 182.51. Gold price action also supported the risk aversion theory with its jump to its three-week highs.

A few minutes earlier Australia had printed its trade balance report, which showed its deficit shrinking from 1.32B AUD to 925M AUD in November. Will this translate to Aussie strength today?

The only other report on tap during the Asian forex trading session is China’s HSBC services PMI at 1:45 am GMT. The report is expected to print at 50.0 after clocking in at 53.0 in the previous month. A significantly weaker reading could weigh on the comdolls and further push low-yielding currencies higher across the charts.

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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