Covid reality replaces stimulus hope as US retail sales disappoint

Covid reality replaces stimulus hope as US retail sales disappoint

Safe haven currencies including the US dollar strengthened this morning as economic data in the US and UK come in weaker than expected. France announces a new 6 pm curfew as criticism of Europe’s vaccine roll-out intensifies. Speculators who were short the US dollar are buying the greenback this morning to close positions in front of the weekend and possible violence during next week’s Presidential inauguration.

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  • FX Rates
    January 15, 2021

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The dollar is king today with concerns around the viability of President-elect Biden’s $1.9T stimulus plans. Compounding the passing of a stimulus bill is the Trump impeachment process which is seen as possibly tying up the Senate.  Meanwhile, the economy suffers with headline retail sales in December coming in at -0.7% vs. the 0.0% expected. The core reading came in at -2.1% vs. forecast of -0.3%.

    GBP

    The pound sank on weak economic news out of the UK with the British economy 8.5% below pre-pandemic levels. Over the past month, the pound has risen multiple times to the 1.37 level only to retrace back toward 1.36.

    EUR

    The euro is weaker this morning on overall dollar strength as France announces a new 6 pm curfew as of this Saturday to fight spread of the virus.

    CAD
    The Canadian dollar traded as low as 1.2650 before snapping back above 1.27 as the price of oil sank on economic concerns. 
    ASIA/PACIFIC

    The Australian dollar weakened as risk appetite for commodity currencies takes a hit. The currency traded over 0.78 for the third time this year and quickly retraced to 0.77 as Covid concerns sapped optimism on the global economy and commodity prices.

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Peter Compton
WRITTEN BY
Peter Compton

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