Markets shook off the viral infections, deaths and lockdowns to resume the ‘Santa Rally’. The deluge of liquidity in markets will ensure equities rise and the market inertia continues to pound the US Dollar. The EUR rose to 1.2160, while the GBP surged to 1.3430, as the EU/UK deal moves closer. The deal will probably be done in the next couple of days, but the damage it does to the UK economy, will be beyond repair.
The reserve weakness has allowed the commodity currencies to bask in relativity. The AUD pushed back above 0.7550, supported by the RBA minutes, while the NZD looks to regain 0.7100. These trade exposed currencies will suffer the wrath of the Chinese trade war, although New Zealand is attempting to remove themselves from the Chinese sights. The Australian target is well and truly set and without the support of the US, looks likely to fail.
Economic data in Australia and the lack of virus infections, support a strong economic recovery in Australia, but many mines lie in the waters ahead.