Forex Today: US Dollar on the backfoot as optimism persists

What you need to take care of on Tuesday, December 28:

The US Dollar extended its Friday slide, ending Tuesday with modest losses against most major rivals. Softening US inflation, as per data released last week, coupled with Chinese news to boost the market sentiment after a long weekend.

China upwardly revised its Gross Domestic Product (GDP) estimate for 2021, bringing it up to 8.4% from 8.1%. Additionally, the government continues to ease covid-related restrictions, which will mitigate the negative impact limitations had on the economy. Finally, the China Immigration Administration announced it would resume issuing visas for mainland citizens travelling abroad.

Global stocks were supported by speculation the Chinese government would focus on boosting growth and move further away from its covid-zero policy. Wall Street traded mixed, with the DJIA up, but the Nasdaq Composite is shedding roughly 100 points.

On a down note, RussianPresident Vladimir Putin signed a decree that bans the sale of Russian oil to countries that imposed the oil price cap. It will run from February 1 to July 1. There are reports softening the headline and noting that it does not necessarily imply oil exports to countries with formal bans.

The EUR/USD pair keeps hovering at around 1.0650, while GBP/USD is down to 1.2025. The AUD/USD pair trades in the 0.6730 price zone, while USD/CAD hovers around 1.3520. Easing oil prices weighed on the CAD as the WTI trades at around $79.30 a barrel. Finally, USD/JPY ticked higher and trades at 133.35.

Gold peaked at a fresh 3-week high of $1,833.32 but eased towards its comfort zone at around $1,815 by the end of the day.

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