Here is what you need to know on Thursday, January 2: The US Dollar (USD) Index gained more than 2.5% in December and closed the third consecutive month in positive territory.
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USD/CAD halts its two days of gains, trading around 1.4370 during the Asian hours on Thursday.
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FX option expiries for Jan 2 NY cut at 10:00 Eastern Time via DTCC can be found below.
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Gold prices rose in Pakistan on Thursday, according to data compiled by FXStreet.
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Today we get the second of China’s monthly manufacturing PMIs, from Caixin/S&P Global, due at 0145 GMT, which is 2045 US Eastern time:
Earlier this week I posted on the difference between the official and the Caixin PMIs.
ICYMI …
The PMIs (Purchasing Managers’ Indexes) from China’s National Bureau of Statistics (NBS) and Caixin/S&P Global differ primarily in survey scope, methodology, and focus. Here’s a breakdown of the key differences:
1. Provider and Affiliation
NBS PMI:
Caixin/S&P Global PMI:
2. Survey Scope
NBS PMI:
Caixin PMI:
3. Sample Size and Composition
NBS PMI:
Caixin PMI:
4. Release Dates
NBS PMI:
Caixin PMI:
5. Interpretation and Use
NBS PMI:
Caixin PMI:
6. Key Insights and Differences in Results
Why Both Matter:
By analyzing both, investors and policymakers can obtain a more comprehensive picture of China’s economic health and its underlying dynamics.
This article was written by Eamonn Sheridan at www.forexlive.com.
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The authorities in China have introduced new rules requiring banks to flag risky transactions, including those involving cryptocurrencies, making it more difficult to buy and sell Bitcoin and other cryptocurrencies using the yuan.
“Risky” Crypto Transactions
The State Administration of Foreign Exchange’s new requirement, introduced at the end of December, mandates banks to monitor and report “risky foreign exchange trading behaviours.” These include underground banks, cross-border gambling, and illegal cross-border financial activities involving cryptocurrencies.
“The new rules will provide another legal basis for punishing cryptocurrency trading,” Liu Zhengyao, a Shanghai-based lawyer from ZhiHeng Law Firm, wrote in a WeChat post. “It can be foreseen that mainland China’s regulatory attitude towards cryptocurrencies will continue to tighten in the future.”
The new rules apply to all local banks in mainland China. Banks must also track activities based on the identity of the involved parties, the source of funds, and trading frequencies. Furthermore, they are required to implement risk-control measures to restrict the provision of certain risky services.
The Great Crypto Crackdown
Once the leading country in Bitcoin transactions, China imposed strict curbs on the industry in 2017, banning all cryptocurrency exchanges and initial coin offerings (ICOs) overnight. The crackdown forced all then-local crypto exchanges to shut their operations in the country and relocate abroad. Now, some of these exiled exchanges, including Binance, Huobi, and OKX, are among the top names in the industry.
China’s anti-crypto stance intensified further in 2021 when the country’s communist government ordered the closure of mining operations in regions like Sichuan and Xinjiang. It also barred financial and payment institutions from offering crypto-related services and declared that overseas crypto services offered to Chinese residents are illegal.
However, the Chinese government still holds about 194,000 Bitcoins, worth approximately $18 billion, which it acquired over the years from raids and seizures of illegal operations.
Meanwhile, China is the leading nation in central bank digital currency (CBDC) development. The government developed the digital yuan and has been testing it for years through pilot programs. However, it remains unclear when the digital yuan will be released on a mass scale.
This article was written by Arnab Shome at www.financemagnates.com.
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USD/JPY
kicked off the new year by trading higher, to circa 157.75, early
here in Asia before losing all of it and dropping back towards 157.00
as I post. USD/CHF weakened to under 0.9050. EUR, AUD, GBP, NZD all
gained against the big dollar in the opening session also.
News
flow was limited. Over the break we had domestic terrorism incidents
in the US with mass murders in New Orleans and further casualties in
Las Vegas.
Chinese
equities, both mainland and Hong Kong, slid Thursday.
The
only data of note today was from China, the December 2024 Caixin
Manufacturing PMI came in at a miss on estimates and down from
November:
Concerns
over potential US tariff increases and broader global economic
challenges loom ahead.
Despite
this, the yuan trade-weighted index hit its highest since mid-October
2022. Yes, the yuan is suffering against the super-strong USD, but not as much as some other FX is.
The
US S&P 500 ES futures opened for the year with a gap up but soon
dropped before recovering. As I post its net a little higher on the
session:
This article was written by Eamonn Sheridan at www.forexlive.com.
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Gold prices rose in India on Thursday, according to data compiled by FXStreet.
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Awful news from the US over the new year holiday:
Its unclear if the explosion of the Tesla vehicle is related, but one person is dead and seven injured:
Link to (not very much) more at Axios.
This article was written by Eamonn Sheridan at www.forexlive.com.
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Happy new year, everyone! I hope you enjoyed the holiday break and some of you might still are until next week. If so, definitely rest up well and hope the new year will be a good one for all of us. To kick things off, let’s start with the good ol’ option expiries routine. There will be arguably just one to take note of on the day, as highlighted in bold.
That being for EUR/USD at the 1.0400 mark. That is likely to help keep a lid on price action to start the new year, with key near-term levels also seen thereabouts. The confluence of the 100 and 200-hour moving averages is seen at 1.0400-05 currently. So, put together that should limit any upside price action during the day.
Besides that, there is a modest one for GBP/USD at the 1.2500 level as well. During the quiet holiday period, the figure level has been defended and so the expiries could help with keeping that line in the sand for the day ahead at least.
But with the new year starting on a Thursday, we might not see a full return of market flows until next week. So, just keep that in mind.
For more information on how to use this data, you may refer to this post here.
This article was written by Justin Low at www.forexlive.com.
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Let’s kick off a quick recap of the year for the USD. Because it is the global reserve currency, understanding it can help improve your odds of anticipating broad market behavior.
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Hong Kong’s Hang Seng index is down more than 2%.
Apart from what has been posted there is nothing fresh.
The Nikkei is closed today (Japan markets holidays today and tomorrow) but I’ve left it in … if the global slide continues it’ll be very ugly for Japan on Monday.
This article was written by Eamonn Sheridan at www.forexlive.com.
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