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.
January 15, 2021
EUR/USD 1.2085 GBP/USD 1.3582 USD/CAD 1.2758 AUD/USD 0.7684 USD/JPY 103.85 USD/CNH 6.4801 USD/ILS 3.2686 USD/MXN 19.8663 USD/CHF 0.8898 USD/INR 73.0675
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.CADThe 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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