Source: ForexYard
The Japanese yen posted gains vs. both the US dollar and euro during overnight trading, as concerns regarding the upcoming US “fiscal cliff”, a batch of automatic tax increases and spending cuts set to take place at the beginning of the year, led to risk aversion in the marketplace. Negotiations to come up with a way to avoid the “fiscal cliff” between US Congressional leaders appear to have made little progress.
Fears that the “fiscal cliff” could send the US back into recession also weighed down on the price of gold, which fell more than $3 an ounce last night. Crude oil fell just over $0.40 a barrel amid signs that demand in the US is slowing down.
Main News for Today
US New Home Sales- 15:00 GMT
• Today’s figure is forecasted to come in at 387K, slightly lower than last month’s
• Any worse than expected news could lead to additional dollar losses against the yen
US Crude Oil Inventories- 15:30 GMT
• US inventories are forecasted to have gone up by 0.5M barrels last week
• A higher than expected figure today would signal decreased demand in the US, which would weigh down on oil prices in afternoon trading
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