The U.S. Dollar enters its last week of January improved by only three-tenths of a percent for the month as swings throughout each week have symbolized the mixed feelings of optimism and negativity.
Overview
On the one hand, although vaccines are rolling out slowly, investors feel there is no way to go but up when it comes to improving the amount of people vaccinated and see stimulus as the best guarantee of growth moving forward.
Nevertheless, the other side of the coin is the slowness caused by politics in passing bills for major spending. Data has shown that the economic beginning of the year has been slower than thought previously and something has got to give. As we go into a week of crucial earnings for tech companies that have dominated the advancement in stocks, expect any disappointment to favor the buck’s flow which could cause an overall gain for the currency before February.
As we watch for what the headlines will say this week, the economic focus will be on the end of the week as we get a glimpse of important Q4 data revealing Gross Domestic Product growth, personal income, and spending, as well as home sales. Consumer Confidence and Durable Goods Orders will come in the middle of the week. On Wednesday at 2 pm, we will have the FOMC decision meeting and press conference.
What to Watch Today…
- No major events scheduled for today
EUR ⇓
The Euro is trading on a weakening trend after a week of political turmoil in Italy and awful COVID-19 numbers that show the economic recovery has derailed a bit. France is the latest country to state the need to lockdown further, only exacerbating concerns over dwindling economic indicators.
We shall see if the online “Davos Conference,” held by the World Economic this week will produce any further headwinds as focus will be on statements by China, Germany and France with a new representative for the U.S. Focus this week will be somewhat on stock and stimulus, but there are items in Europe of concern particularly with how to regulate crypto after ECB President Christine Lagarde warned that this is “funny business.”
GBP ⇓
The Pound is exactly where it was at the start of the year with recent gains outdoing downward swings during the first month of transition for the U.K. as it trades as a non-EU member. We continue to be worried about the hiccups at ports of trade such as Dover as well as the lack of framework and planning over a financial services deal. Nevertheless, the U.K. is seeing its population percentage of those vaccinated keep improving. Tomorrow we will get a slew of data to consume as we look at income figures for November and Retails Sales for January. Solid readings could improve the Sterling.
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