EU FINANCIALS: Landsbankinn HF: Q4 Results        

The aforementioned (light) uptick in the dollar index sees both GBPUSD and EURUSD register fresh session lows, both down 0.2% at typing.

• GBPUSD now trades at 1.3443, through yesterday’s low and narrowing the gap to support at 1.3409 (20-day EMA). However, clearance of firm support at 1.3348 (50-day EMA) is required to counter the current bullish trend condition.
• EURUSD meanwhile is testing the 20-day EMA of 1.1724. A clear breach of this average would signal scope for a deeper retracement, allowing an overbought condition to unwind.

The Bloomberg dollar index is re-testing earlier session highs of 1204.3,  currently +0.1% today. A pullback in US yields after China announced additional tariffs on beef imports has had a limited impact on FX markets, with aggregate activity contained given the NYE holiday in several countries. A higher close for the BBDXY today would mark a fourth consecutive positive session, although resistance levels at 1205.4 (Dex 23 high) and 1207.5 (20-day EMA) remain intact.

• The Kiwi underperforms the G10 basket, with NZDUSD down 0.4% at typing. The pair is testing support at the 50-day EMA of 0.5766, clearance of which would expose the December 19 low of 0.5736.
• Meanwhile is AUDUSD, focus remains on the psychological 1.16 figure (currently +0.2% at 1.1585).
• Both USDCNH and USDCNY are hovering just below the 7.0000 figure. Overnight, the official Chinese manufacturing and non-manufacturing PMIs for December were stronger-than-expected, inching into expansionary territory.
• The USD/CNY fix printed at 7.0288, while the BBG market consensus was below the 7.00 level at 6.9966. The USD/CNY fixing was below yesterday’s and last week’s levels resuming the downtrend. We wrote yesterday that Authorities may act to slow any acceleration in the downtrend, but the outlook for CNY remains positive, with markets almost uniformly looking for USDCNY further below 7.00 in 2026. See here: https://www.mnimarkets.com/articles/higher-usdcny-fix-only-provides-temporary-support-before-new-lows-1767082916217
• Today’s European session is very quiet, with only UK markets open for a half day. Focus this afternoon is on the US weekly jobless claims release.

Latest from Reuters sources on NVIDIA chip demand from China:

• "Nvidia NVDA.O is scrambling to meet strong demand for its H200 artificial intelligence chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co 2330.TW to ramp up production, sources said."
• "Chinese technology companies have placed orders for more than 2 million H200 chips for 2026, while Nvidia currently holds just 700,000 units in stock, two of the people said."
• "The exact additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said Nvidia has asked TSMC to begin production of the additional chips, and work is expected to start in the second quarter of 2026."