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Dollar gets whacked!

Gold – Daily Candlesticks
Source: GKFX / MT4 (December 1, 2020)

XAU/USD has pulled back 50% of its rally that began in March and rebounded strongly on Tuesday back above $1800 per oz. 
 

TAKEAWAYS


•    Dollar breakdown: DXY hits 91 handle, EUR/USD > 1.20
•    S&P 500 up over 1.1% for solid start to new month
•    Bitcoin dumped again from record high
•    ‘Bipartisan’ stimulus bill shot down by Senate leader McConnell
•    AirBnB looks for valuation of $35 billion in IPO
•    DAY AHEAD: Australia GDP, Germany retail sales, ADP unemployment, Fed Beige book
 

GURU WISDOM


“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioural discipline that are likely to get you where you want to go.” - Benjamin Graham
 

MARKETS


*Daily closing price
↗ EUR/USD    1.2072        (+1.20%)
↗ GBP/USD    1.3421        (+0.75%)
↗ USD/JPY    104.34        (+0.06%)
↗ S&P 500    3662.45    (+1.13%)
↗ Hang Seng    26,567        (+0.86%)
↗ Gold        1814.81    (+2.12%)
↗ Oil (Brent)    44.96        (+1.91%)
↘ Bitcoin    19,137        (-2.79%)
 

NEWS

EUR/USD breakout

The US dollar was hit hard late on Tuesday on news about a prospective US stimulus plan. Passing a stimulus deal is thought to be good for risky assets and would hit havens like the USD. Government spending is one of the components in the calculation of GDP- it directly adds to growth calculations. The dollar weakness played well for gold, which was sitting at a 50% pullback of this year’s rally (see chart).
 

New stimulus


A bipartisan bill worth $908 billion was floated by some lawmakers but was quickly knocked back by senate majority leader Mitch McConnell. GOP (Republican) Senators are readying their own smaller $470 billion proposal. Either way, some movement on stimulus has been treated as a positive, especially when president-elect Joe Biden has said anything agreed in the ‘lame duck’ session would be a starter towards bigger spending plans once he is in office.
 

Bitcoin volatile


The leading crypto was hit again on Tuesday after touching a record high on Monday, this time sliding over $1500. The price narrowly avoided the key $20,000 level on major exchanges. BTC ended Tuesday well off its lows and so could already be on course for another leg up. Guggenheim, the $5.3 billion investment fund said it could make up to 10% of its assets available to invest in the Greyscale trust, the fund dedicated to buying Bitcoin.
 

DAY AHEAD 


*Times in GMT
00:30    AUD    Gross Domestic Product (QoQ)(Q3)     2.6 %    -7 %
07:00    EUR    Retail Sales (MoM)(Oct)         1.2 %    -2.2 %
13:15    USD    ADP Employment Change(Nov)         420 K    365 K
19:00    USD    Fed's Beige Book             REPORT