Stocks soar, dollar lower, strong US housing data
Global stock markets soared overnight and the dollar declined amid investor optimism with the new Biden presidency. Quickly reversing numerous Trump decisions, Biden’s slew of executive orders yesterday drove confidence that a less uncertain world lies ahead, despite the pandemic. Upbeat US housing data released this morning surprised the market, helping fuel a strong open in the S&P 500, which reached a fresh record high. US Treasury yields edged higher, oil and gold are both slightly lower.
January 21, 2021
EUR/USD 1.2137 GBP/USD 1.3717 USD/CAD 1.2627 AUD/USD 0.7755 USD/JPY 103.6100 USD/CNH 6.4675 USD/ILS 3.2733 USD/MXN 19.7115 USD/CHF 0.8868 USD/INR 72.9975
The US dollar is lower against its G-10 peers amid investor optimism with the new presidency and from this morning’s upbeat US housing data. US stocks are reaching all-time highs on confidence that Biden will introduce strong fiscal measures to support economic growth and corporate earnings.GBP
The UK pound gained nearly 0.75% overnight, reaching $1.3745, its highest level since May 2018. Investors are increasing demand into UK assets, continuing to reverse underinvestment related to the post-Brexit negotiations.EUR
The euro is higher by nearly 0.5% after European tech firms led the Stoxx 600 Index to its highest level in nearly a year. As expected, the European Central Bank left rates unchanged and confirmed the size of its emergency Pandemic Purchase Program (PPP) at €1.85 trillion.CAD
The USD/CAD currency pair dropped below 1.26 and to its lowest level since April 2018 amid the broadly lower dollar combined with comments from Bank of Canada Governor Tiff Macklem, who said today that the central bank may not need as much stimulus as previously thought to support the economy.ASIA/PACIFIC
The Chinese yuan moved little overnight. The Chinese government imposed unprecedented sanctions on former Secretary of State Michael Pompeo and 28 other Trump administration officials saying that they had made “crazy moves” that harmed US-China ties.Both the Australian and New Zealand dollars gained overnight due to increased demand for commodity-currencies within the optimistic global growth story
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