Inauguration Day! Markets buoyant, dollar soft
Joe Biden becomes the 46th President of the United States today. Global equities are higher, led by strong earnings from Netflix and Morgan Stanley and by higher Asian bourses. Investors are expecting greater fiscal stimulus with a Biden presidency. The dollar is slightly lower, US 10-year Treasuries are steady at 1.10%, and oil and gold edged higher.
January 20, 2021
EUR/USD 1.2103 GBP/USD 1.3671 USD/CAD 1.2686 AUD/USD 0.7737 USD/JPY 103.7000 USD/CNH 6.4674 USD/ILS 3.2650 USD/MXN 19.5926 USD/CHF 0.8903 USD/INR 73.0263
The dollar is lower and US equities opened higher lifted by strong corporate earnings and expectations of greater stimulus with a Biden presidency. Janet Yellen, soon to be Secretary of the Treasury, said she will focus on helping the unemployed and small businesses, adding that we will take on China’s “abusive” trade and economic policies. She stated that she will not be pushing for a weak dollar to gain competitive advantage, and criticized countries that do so.GBP
The UK pound is stronger for a second day versus the US dollar, and even more so against the euro. The UK reported inflation data for December today, core CPI rose 1.4% compared to 1.3% expected and 1.1% in November.EUR
The euro is lower amid record Covid-19 deaths in Germany. Italy’s government managed to survive a Senate confidence vote yesterday, but Prime Minister Conte did not get an overall majority due to concerns with his leadership in handling the pandemic and economic recession. Traders await tomorrow’s ECB meeting.CAD
The Bank of Canada meets today. Most expectations are for no change in its benchmark rate of 0.25%, but there are some that expect a mini-cut, maybe 10 bps, based on recent Canadian economic weakness, relatively high Covid-19 cases, and comments from BOC Governor Macklem, who suggested that there may be room to ease and still remain over zero.ASIA/PACIFICThe Chinese yuan moved little overnight, amid China’s stock market, which pushed higher overnight. Asian currencies as a group are higher, led by the Singapore dollar and South Korean won. Taiwan saw a 38% jump in December export orders to a record $60 billion.
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