Greenback Underperforms, Familiar Themes In Play

Familiar themes continued to grab attention, as U.S. fiscal matters, Brexit & global Covid-19 situation provided the main talking points. Price action across G10 FX space was subdued, with USD underperforming ahead of the Christmas break & with DXY moving away from Tuesday highs. U.S. Pres Trump's demand to rewrite certain parts of the Covid-19 relief bill inspired little in the way of immediate, material reaction in the greenback.

• Sterling firmed up a tad as Brexit news flow remained front and centre, with EU Chief Negotiator Barnier noting that both sides were ready for a "final push." A tweet from ITV's Peston citing a UK gov't source as seeing a deal on the table today added to hopes for a positive resolution to the dragged-out talks.
• AUD climbed to the top of the G10 scoreboard in thin, pre-holiday trade, despite familiar risks. AUD/NZD moved through the NZ$1.0700 mark and consolidated just above there, ahead of today's expiry of A$684mn worth of options with strikes at that round figure.
• Bank Indonesia stepped in to shore up the rupiah for the second consecutive day, intervening on spot FX interbank market & via brokers. The Bank cited the need to maintain IDR stability amid global risk-off environment.
• THB was rangebound ahead of the monetary policy decision from the BoT, with policymakers expected to express discomfort with the baht strength.
• U.S. initial personal income/spending, jobless claims, flash durable goods orders, new home sales & final U. of Mich. Sentiment, Canadian GDP & Italian confidence gauges take focus today.