Market commentary

  • The final month of 2020 saw the dollar continue its downward trajectory. The approval and rollout of multiple vaccines globally more than offset the rising number of COVID-19 cases and the emergence of a more contagious strain of the virus, resulting in a sustained movement away from the safety of USD. The ICE U.S. Dollar Index® (USDX®) opened December at its high for the month, 91.90. However, the index fell steadily from that point and spent most of the month between 90 and 91. A push lower during the final week dropped USDX below the 90 level to close out December at 89.89, the lowest month close since March 2018.
  • The eventual Brexit resolution, with the two sides reaching agreement near month end, helped propel both EUR and GBP to 2020 highs versus USD in December. EUR rose above $1.20 on the first day of the month and remained above that level throughout the period, closing out at $1.2209. Brexit headlines kept intraday volatility for the pound very high. However, GBP climbed almost 4 cents in December, rising above $1.35, sterling’s first new high against USD in 2020 to close the month just below $1.37. It was a similar story for other European currencies. CHF advanced to a 6 ½ year high, moving above 0.88. NOK ended December at 8.57 per dollar, almost 30% higher than the kroner’s March 2020 low.
  • In Asia-Pacific, positive economic and COVID-19 news out of China continued the rally in the yuan that began in June. CNY rose to 6.52 per dollar by month end, the strongest level for the currency since June 2018. AUD climbed above 77 US cents on the last day of December while NZD hit 72 US cents the same day, an almost 4 year high for both the Aussie and Kiwi. JPY showed small but steady improvement throughout the month, closing out near the 103 level. In the Philippines, PHP pushed through 48 per dollar, the highest level since November 2016.
  • Elsewhere, TRY continued its recovery, albeit at the expense of extremely high interest rates. The lira rallied back through 8 per dollar, winding up December at 7.4257. Stronger oil prices helped propel CAD to a 3 year high of 1.2683 and MXN to a post-March 2020 high of 19.70 per dollar. On the strength of other commodity prices, the South Africa rand posted further gains into year end. ZAR has improved about 20% since its April 2020 low, finishing out December at 14.678 per dollar. USD did manage to hold its own against a few currencies during the month, including BRL, RUB and UAH.

USDX® Performance

Spot rates TICKER 1-Dec-20 31-Dec-20 Monthly Change
USD/EUR EUR A0-FX 1.20678 1.2215 1.205%
JPY/USD JPY A0-FX 104.285 103.215 1.037%
USD/GBP GBP A0-FX 1.3418 1.3663 1.793%
CAD/USD CAD A0-FX 1.29346 1.2728 1.623%
SEK/USD SEK A0-FX 8.47426 8.22355 3.049%
CHF/USD CHF A0-FX 0.89931 0.88468 1.654%
US Dollar Index DX A0 91.313 89.937 -1.530%
Other contracts TICKER 1-Dec-20 31-Dec-20 Monthly Change
Mini Brent Crude BM-ICS 47.42 51.8 8.456%
MSCI World Index MWL 2612.6 2682.1 2.591%
MSCI Emerging Markets Index MME 1227.4 1288.2 4.720%
Mini US Dollar/Offshore Renminbi CHM-ICS 6.5658 6.5125 0.818%

USDX® Futures Performance (YTD)

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USDX® futures and options offer investors tools to speculate on moves in the $USD relative to a basket of world currencies.

USDX® Futures Mini USDX® Futures USDX® Options
Trade on ICE Futures U.S. ICE Futures Singapore ICE Futures U.S.
Contract size One contract = $1000 X index value One contract = US $200 x index value One futures contract ($1000 X Index value)
Expiry Third Wednesday of the expiration month Cash-settled against USDX® Futures on the last Trading Day for the expiry month Third Wednesday of the expiration month
Settlement  Physically settled against the six component currencies in their respective percentage weights Cash-settled against the USDX® futures final settlement price Physically settled against the six component currencies in their respective percentage weights
Trading hours 8:00 P.M. - 5.00 P.M. ET 8:00 A.M. - 6.00 A.M. SGT 8:00 P.M. - 5.00 P.M. ET
Symbol DX SDX DX
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