Confidence in the global outlook improves
Confidence in the global economy improved during the week with markets taking an optimistic stance towards next year’s outlook.
There were hopes that the US and China would sign the phase-one trade deal early in 2020 which would ease fears over trade wars.
In this environment, potential defensive dollar demand faded and there was a cutting of long US positions into the year-end period.
Expectations of a stronger global economy for the year ahead were also important in triggering demand for commodity currencies, especially as oil prices strengthened.
The durable goods orders data was weaker than expected with a headline 2.0% November decline while core orders failed to increase.
Elsewhere, new home sales and the Richmond manufacturing survey were also weaker than expected.
The data overall had some impact in undermining confidence in the US outlook relative to Europe which undermined the dollar.
AUD/USD and NZD/USD both pushed to 5-month highs just below 0.7000 and 0.6700 respectively as USD/CAD also retreated on the week to below 1.3100.