Euro sharpens losses to two-week low against pound
Euro declined in European trade against basket of major rivals, sharpening losses for the second straight session against the pound, and hitting a two-week trough on prospects the ECB will cut interest rates faster this year than Bank of England.
Such forecasts come as European inflation slows down to near the ECB's 2% target, while UK inflation remains more stubborn.
EUR/GBP
EUR/GBP fell 0.3% to 0.8645, the lowest since December 20, with a session-high at 0.8670, after losing 0.2% on Friday, the first loss in three days on profit-taking away from a five-week high at 0.8715.
Euro tumbled 1.9% against the pound in 2023, the second yearly loss in three years, as BOE grew more aggressive in policy tightening compared to the ECB.
European Rates
Following the ECB's latest policy meeting, markets now expect 150 basis points of total interest rate cuts by the ECB this year.
To regauge such estimates, markets now await mainline European inflation data for December.
UK Rates
Now markets are pricing in 125 basis points of interest rates cuts by the BOE this year, which is below the estimated cuts by the ECB, in turn underpinning the pound.
UK consumer prices remain stubbornly off the BOE's 2% target, thus requiring a more aggressive policy.
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US, European markets closed for holiday
US, European, Chinese, Japanese and Australian markets among others are closed today for an official holiday celebratign the New Year.
Wall Street will resume trading tomorrow while other markets in Japan and Switzerland will extend the holiday.
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Oil declines and marks first yearly loss in 3 years
Oil prices declined on Friday even as tensions in the Middle East continue to rage, with prices marking yearly losses in 2023.
Energy Information Administration data showed monthly US crude production rose to 410.7 million barrels in October, a record high, while daily production tapered off to 13.248 million bpd.
Otherwise, the dollar index rose 0.1% as of 101.3 as of 21:07 GMT, with a session-high at 101.4, and a low at 101.7.
Brent March futures fell 0.15% today, or 11 cents to $77.04 a barrel, marking a weekly loss of 2.25%, and a monthly loss of 4.4%, and a yearly loss of 12.15%.
US crude February futures fell 0.15%, or 12 cents to $71.65 a barrel, marking a monthly loss of 5.8%, and a yearly loss of 16%.
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US stock indices decline but still head for strong yearly gains
US stock indices declined on Friday, the last session of 2023, while heading for strong yearly gains.
S&P 500 marked an excellent profit of 24.6% this year, while Dow Jones surged 13.8%, as NASDAQ added 44.2%.
All three indices are heading for the ninth weekly profit in a row, the longest such streak of gains for S&P 500 since 2004.
Even as 2023 experienced successive interest rate hikes by the Federal Reserve, the markets were confident of the end of the current cycle of policy tightening.
On trading, Dow Jones fell 0.2%, or 65 points as of 16:15 GMT to 37,644, while S&P 500 fell 0.4%, or 18 points to 4,765, as NASDAQ shed 0.7%, or 111 points to 14,984.
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