US Dollar trades flat while traders are make their way to the Christmas table

LONDON (December 24) The US Dollar (USD) trades with small gains on Tuesday, seeing the DXY Index trade slightly above 108.00, as markets are starting to unwind towards the Christmas holiday.  The Greenback failed to significantly move despite news that China’s policymakers are floating the idea of selling nearly 3 trillion Yuan (CNH) in special treasury bonds in 2025, Reuters reported on Tuesday. The additional capital should boost the slowing and sluggish Chinese economy. 

The US economic calendar is a very light one on Tuesday, with just minor indicators such as the Philadelphia Fed Non-Manufacturing Activity Index and the Richmond Fed Manufacturing Index regional surveys for December. One main takeaway for the last few data points of December is that the US manufacturing sector is sounding the alarm bell, with several indicators confirming the sector is falling further into contraction. 

Daily digest market movers: Richmond Manufacturing confirms contraction

• Policymakers in China plan to sell a record 3 trillion Yuan ($411 billion) of special treasury bonds in 2025, Reuters reported Tuesday. The government seeks to support consumption subsidies, business equipment upgrades as well as investments in key technology and advanced manufacturing sectors, according to Reuters.
• French Prime Minister Francois Bayrou aims to reach an agreement with parliament on a 2025 budget that would reduce the deficit to close to 5%, near the level of his predecessor Michel Barnier, Bloomberg reports.
• Near 13:30 GMT,  the Philadelphia Fed Non-Manufacturing Activity Index for December was published. The actual number came in at -6 agains the previous reading at -5.9.
• At 15:00 GMT, The Richmond Fed Manufacturing Index is expected to stay in contraction at -9 coming from -14.
• Asian equities are fired up after the 3 trillion Yuan expected injection from China. Europe is rather struggling to benefit from that tailwind and remains looking sluggish. US futures are marginally in the green. 
• The CME FedWatch Tool for the first Fed meeting of 2025 on January 29 sees a 91.4% chance for a stable policy rate against a small 8.6% chance for a 25 basis points rate cut.  
• The US 10-year benchmark rate trades at 4.59%, the high of last week.

FXStreet