Reports that Biden plans $2T in new stimulus spending sends dollar higher
The US dollar is generally stronger vs. other major currencies on news that President-elect Joe Biden will propose a large stimulus spending package later today. The dollar was up overnight on the possibility more lockdown measures would be necessary. The central bank of Israel indicated massive intervention may be necessary in 2021 to prevent the shekel from further appreciation.
January 14, 2021
EUR/USD 1.2118 GBP/USD 1.3652 USD/CAD 1.2683 AUD/USD 0.7746 USD/JPY 104.06 USD/CNH 6.4725 USD/ILS 3.1889 USD/MXN 19.8431 USD/CHF 0.8902 USD/INR 73.0462
The US dollar gained in morning trading relative to most major currencies, whereas commodity currencies strengthened. Some profit taking on short dollar positions help the greenback as did news of additional stimulus. Initial Jobless Claims for the week of January 9 increased to 965K which was far higher than the 789K expected and the prior week's of 784K. A weaker job market reinforces the need for bigger stimulus packages.GBPThe pound lost ground vs. the dollar on overall dollar strength. Also, FX traders noted significant selling pressure as the pound approached 1.37 yesterday. There have been large speculative bets on the strengthening pound which began to unwind overnight causing the pound to weaken.EUR
The euro is trading at is weakest levels in a month vs. the US dollar. Political disruption in Italy added some uncertainty to the eurozone economy after a small political party pulled out of the ruling coalition putting the existing administration at risk.CAD
The Canadian dollar is flat vs. the US dollar in volatile trading. Commodity prices have been generally strong lifting all commodity currencies. Despite the price of oil being slightly lower this morning, the Canadian dollar is gaining on overall US dollar weakness.ASIA/PACIFIC
The Australian dollar slipped in morning trading after being stronger overnight. Commodity currencies are generally expected to gain as more stimulus spending is announced by the US and other countries.
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