The U.S. Dollar is trading in mostly tight ranges, seeing strong moves against the Oceanic currencies of AUD and NZD ahead of the Federal Reserve’s meeting announcement this afternoon at 2 PM.
Overview
Fed Chairman Jerome Powell is expected to be questioned plenty as this is his first opportunity to address the press under a new administration that is actively working to pass a spending bill he would like to see voted on soon. Global markets slipped a bit although Microsoft surprised with its solid earnings, but the biggest story has been the GameStop stock squeeze that is making traders scratch their heads. An online campaign to revive the brick-and-mortar’s stock value against short-sellers who find the company fundamentally doomed for the modern economy. Seems to be working, much to everyone’s awe.
As far as real economic growth numbers are concerned, Decembers Durable Goods for the U.S., when excluding transportation, actually increased by more than expected, adding a bit of positivity to what have been disappointing figures thus far looking into the end of Q4. Markets are certainly giving us strange headlines, but reality continues that vaccines must be rolled out, a stimulus bill must come to fruition, and growth cannot be counted on as long as we see the need to keep people inside their homes.
What to Watch Today…
- Fed Meeting & Presser 2 PM
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EUR ⇓
The Euro fell overnight as the situation gets worse in terms of physically preventing infections and vaccine delays are causing major concern. It seems that while things are slightly improving in the U.S., Europe’s COVID case is becoming tougher to manage. Since political issues have also risen, the International Monetary Fund downgraded the EU’s growth outlook.
Additionally, members of the European Central Bank are looking into the Euro’s strength as it is preventing the inflationary growth they want to see developing. The shared currency may end the month slightly weaker if the trend continues.
GBP ⇓
The Pound gained some ground overnight, but it is giving it back this morning. The U.K. does not have a ton of news to present today, but unlike neighboring EU, it is seeing a much better distribution to its vaccine program. Government officials said it was seeing enough progress to reopen schools as soon as February 22nd. We shall see how much the dollar rallies today as it is picking up steam as this is typed and finished.
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