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America's Roundup: Dollar falls from 18-month high before two-day Fed meeting, Wall Street sinks, Gold gains, Oil drops as oversupply, economic growth worries weigh-December 18th,2018

Market Roundup

• Fed draws White House fire as it prepares to raise rates.

• Facing opposition, Britain's May will bring Brexit deal back to parliament.

• No-deal Brexit almost certain to trigger UK rating cut – Fitch.

• ECB can delay rate hikes if growth slows more than expected: Wunsch.

• Italy hopeful of imminent budget deal with EU.

• Democrats jostle over investigations into Trump's finances, Russia ties.

• Standoff over Trump border wall puts U.S. Congress in budget 'pickle'.

• US Dec NY Fed Manufacturing, 10.90, 20.00 forecast, 23.30 previous.

• CA Oct Securities Cdns C$, 14.93 bln, 10.59 bln, 10.26 bln revised.

• CA Oct Securities Foreign C$, 3.98 bln, 7.70 bln prev, 7.76 bln revised.

• Venezuela creditors demand payment on $1.5 bln defaulted bond – lawyer.

• Mexican government defends budget cuts, open to adjustments

Looking Ahead - Economic Data (GMT)

• 00:00 New Zealand Dec NBNZ Business Outlook, -37.1% previous

• 00:00 New Zealand Dec NBNZ Own Activity, 7.6% previous

• 02:00 New Zealand Nov RBNZ Offshore Holdings, 55.1%

• 20:00 New Zealand Q4 Westpac Consumer Survey, 103.5 previous

Looking Ahead - Events, Other Releases (GMT)

• N/A Norway Central Bank Governor Oystein Olsen gives a speech to the regional network, region East in Oslo

• 08:15 ECB Vice President Luis de Guindos participates in a panel discussion at an event in Madrid

• 09:00 Bank of Finland Governor, ECB council member Olli Rehn speaks at a news conference as the BoF updates its forecasts for the Finnish economy in Helsinki 

• 11:00 Bank of Greece Governor Yannis Stournaras speaks at the launch of a book on economic policy and climate change in Athens

• 12:00 ECB Governing Council Member Jozef Makuch holds news conference in Bratislava

Currency Summaries

EUR/USD: The euro rose higher against the U.S. dollar on Monday as the dollar softened ahead of the Federal Reserve's policy meeting this week. Investor focus will be on the central bank's policy outlook for 2019 and future interest rate hikes. The euro rose 0.38 percent to $1.1347. The dollar index, which measures it against a basket of currencies, slipped 0.3 percent to 97.07, below last week's 18-month high of 97.71.Immediate resistance can be seen at 1.1388 (Ichimoku Cloud Top), an upside break can trigger rise towards 1.1443 (Dec 10th high).On the downside, immediate support is seen at 1.1292 (Lower Bollinger Bands), a break below could take the pair towards 1.1252 (Higher Bollinger Bands).

GBP/USD: The pound recovered from 20-month low against dollar on Monday as investors unwound short positions as British Prime Minister Theresa May rescheduled a delayed vote in parliament on her Brexit plan. Sterling inched higher as May confirmed the vote postponed last week in the face of deep opposition would happen in the week starting on Jan. 14. Pound was up 0.2 percent against the dollar at $1.2618, not far off a 20-month low of $1.2477 touched last Wednesday, a day after the planned vote in parliament was postponed. Against the euro, the pound fell 0.13 percent to 89.99 pence. Immediate resistance can be seen at 1.2643 (9 DMA), an upside break can trigger rise towards 1.2718 (21 DMA).On the downside, immediate support is seen at 1.2522 (Lower Bollinger Bands), a break below could take the pair towards 1.2474 (December 12th Low).

USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday, as lower oil prices and concerns of a global growth weighed on loonie. Oil prices fell about 1 percent on signs of oversupply in the United States, with investor sentiment under pressure from concern over the prospects for global economic growth and fuel demand. The Canadian dollar was last trading 0.28 percent lower at 1.3417 to the greenback. The loonie traded in a range of 1.3373 to 1.3417.Immediate resistance can be seen at 1.3429 (Higher Bollinger Bands), an upside break can trigger rise towards 1.3424 (Psychological level).On the downside, immediate support is seen at 1.3370 (9 DMA), a break below could take the pair towards 1.3299(21 DMA).

USD/JPY: The dollar weakened against the Japanese yen on Monday as investors positioned themselves ahead of the Federal Reserve's policy meeting this week. The Fed ends its two-day policy meeting on Wednesday and is expected to tighten for a fourth time in 2018. Investors are expecting on signals about the pace of further tightening. The dollar was last trading 0.58 lower versus the Japanese yen at 112.69. Strong resistance can be seen at 113.06 (55 DMA), an upside break can trigger rise towards 113.95 (Higher Bollinger Bands).On the downside, immediate support is seen at 112.41 (Ichimoku Cloud Base), a break below could take the pair towards 112.00 (Psychological Level). 

Equities Recap

European shares tumbled on Monday when a profit warning from online fashion retailer ASOS sent retail stocks into nose-dive as investors fretted that consumers were failing to deliver the traditional pre-Christmas spending boost to markets.

UK's benchmark FTSE 100 closed down by 0.9 percent, the pan-European FTSEurofirst 300 ended the day down by 1 percent, Germany's Dax ended down by 0.8 percent, France’s CAC finished the day down by 1 percent.

Wall Street's major indexes each slid more than 1 percent on Monday on concerns about slowing growth and as DoubleLine Capital's Jeffrey Gundlach suggested that U.S. stocks are in a bear market.

Dow Jones closed down by 2.10 percent, S&P 500 ended down by 2.07 percent, Nasdaq finished the day down by 2.33 percent.

Treasuries Recap

U.S. Treasury prices gained on Monday as weak stocks boosted demand for the low-risk debt ahead of Wednesday's conclusion of the Federal Reserve's two-day meeting at which the U.S. central bank is widely expected to raise interest rates.

Benchmark 10-year notes gained 9/32 in price to yield 2.859 percent. The yields have fallen from a seven-year high of 3.261 percent on Oct. 9.

Commodities Recap

Gold rose on Monday as a slide in the dollar made bullion more attractive for holders of other currencies, while some investors took cover as stocks globally slipped into the red ahead of the U.S. Federal Reserve's two-day policy meeting.

Spot gold was up 0.6 percent at $1,246.10 per ounce by 01:36 p.m. EST (1836 GMT). The metal touched its lowest since Dec. 4 at $1,232.39 an ounce on Friday. U.S. gold futures settled up 0.8 percent at $1,251.80 per ounce.

Oil prices fell more than 2 percent on Monday, with U.S. crude hitting the lowest since September 2017, on signs of oversupply in the United States and as investor sentiment remained under pressure from concern over global economic growth and fuel demand.

Brent crude oil fell 67 cents, or 1.11 percent, to settle at $59.61 a barrel after dropping to a session low of $58.83 a barrel. U.S. crude dropped $1.32, or 2.58 percent to end the session at $49.88 a barrel and tumbled to a low of $49.09 a barrel.
 

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