Forex Today: Risk flips positive in US session, NZD takes top spot

Here is what you need to know for Wednesday, 21 Dec:

The high beta forex space was bid on the day following strong gains in the European equities space that followed through into the US eventually. The antipodeans (AUD+0.61%, NZD +0.84%) and GBP (+0.45%) were performing well throughout early trade and continued to recover from the prior days of supply. The yen and CHF were the worst performers but still managed to end higher vs the greenback. 

As for the US dollar, this was only modestly lower against its major trading partners as markets awaited a deluge of US data Wednesday and Thursday before the Friday holiday. The DXY index ended down 0.02% despite the US 10-year yields ending 3.7% higher. 

Late in the day, US President Joseph Biden addressed the nation at 2:30 pm ET and detailed further efforts to combat the rise of COVID-19 cases. There were no surprises in the speech as the White House had already suggested that lockdown measures are not being considered at this point. Biden confirmed this and encouraged everyone to get vaccinated as soon as possible. 

The relatively light data schedule for Tuesday included the current account deficit for Q3, the Philadelphia Fed's nonmanufacturing index for December and weekly Redbook retail sales.

A decline in the Philadelphia Fed's Mon-Manufacturing index to 28.3 in December from 46.1 in November highlighted the light data schedule. The other services data already released for December have shown solid growth despite rising COVID-19 cases. The ISM's national reading will be released on Jan. 5.

Meanwhile, the current account deficit widened to $214.77 billion in the third quarter from $198.32 billion in the previous quarter. Redbook reported that US same-store Retail Sales were up 16.4% year-over-year in the week ended Dec. 18, larger than a 16% gain in the prior week.

The data schedule will get busier on Wednesday and Thursday before the holiday on Friday. Looking ahead, Gross Domestic Product growth, Consumer Confidence and Existing Home Sales reports will be released on Wednesday. Personal income and spending, Initial Jobless Claims and New Home Sales releases are scheduled for Thursday.

In US equities, at 20.00GMT, the Dow Jones Industrial Average rose 1.5% to 35,505, the S&P 500 increased 1.67% to 4,645, and the Nasdaq Composite was up 2.22% to 15,975.

In the crypto space, upbeat risk drove investors to seek riskier assets whereby the bonds were sold-off. Subsequently, Bitcoin climbed above the 10-DMA, piercing the trend line of the November peak and adding 3.7% on the day to a high of $49,353.49.

However, the monthly chart leans bearish and the RSI drop implies that there is still downside momentum. With that being said, bulls will target a break above $53,000/$54,000 where the 100-DMA is located that will give longs greater control.

Commodities were bid with the CRB index higher by over 2% with US oil, the largest component of the index and as measured by WTI spot ended around 3.2% higher. Copper was 1% higher