Forex Today: Dollar’s advance may be short-lived

Dollar’s advance may be short-lived

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Here is what you need to know on Monday, December 28:

A post-Brexit agreement was finally reached on Christmas Eve. During the weekend, the EU and the UK published the full text of their post-Brexit arrangement, which includes details on trade, law enforcement and dispute settlement among other things.

The accord needs to be ratified by the respective parliaments. On fisheries, the most controversial issue, both parts agreed on a  five-and-a-half-year transition period, in which EU fishing vessels will still have full access to UK waters, with a 25% cut gradually imposed to its fishing quota.

A Christmas shortened week will be followed by the Year-End holidays. Action is expected to remain subdued. Although financial markets could be altered by headlines related to the US stimulus/funding bill, as President Donald Trump didn’t sign it.

The dollar got to recover to some ground last Thursday, but the advance seems corrective. The greenback remains the weakest, with most major rivals holding near this year’s high against the American currency.

Coronavirus immunization is slowly starting worldwide. Europe has kick-started vaccination on Sunday. The good news may maintain markets in a risk-on mood.

Credit: FX Street

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