The U.S. dollar spend the Martin Luther King Jr. holiday mostly rangebound versus its major counterparts. However, the dollar is under pressure this morning.
Overview
The U.S. economic docket is bare this morning but there are plenty of geopolitical events and fundamental data releases abroad to keep dollar traders busy. President Trump is in Davos, Switzerland for the World Economic Forum and will rub elbows with high-level government officials and business executives. At the same time back in Washington, Trump’s impeachment trial will start in the Senate. While historic, the trial is unlikely to remove the president or move currency markets.
We will also be keeping an eye on the developments in China and an outbreak of a deadly virus. The safe-haven Japanese yen has risen in the wake and could see further gains if the outbreak becomes worse.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
The Euro initially dipped overnight but was able to turn positive in early trading after better than expected data out of Europe’s largest economy. The German ZEW report showed investor expectations in January beat forecasts. The 26.7 reading nearly doubled the estimated 15.0 reading.
France and the United States have called a truce over their fight on digital taxes, which is seen as a further de-escalation to trade war fears and allowed the common currency to float higher.
GBP
The British pound was the biggest winner overnight, gaining nearly half a percent versus the U.S. dollar. The jump came after data showed that the U.K. jobless rate remained at a 40-year best. The number of people employed soared to 208K, doubling the print estimated by economists. The unemployment rate is 3.8%.
Futures show a 64% chance the Bank of England will cut rates at the end of the month, down slightly from before the jobs data.
