Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
5 important events this week will bring us!
- British CPI (Wed, 11:30 MT (9:30 GMT)) – According to the forecasts, the indicator will advance by 1.8%. If the actual level is higher, the GBP will rise.
- Canadian CPI (Wed, 15:30 MT (12:30 GMT)) – As for Canada’s consumer inflation index, we are awaiting it to decline by 0.2%.
- FOMC rate statement (Wed, 21:00 MT (18:00 GMT)) – The Federal Reserve is expected to cut its interest rate from 2.25-2% to 1.75-2%. In addition, it is important to pay attention to the dot plot, where the FOMC representatives are going to express their views on the future rate changes. After that, the Fed Chair Jerome Powell may also provide comments which may shake the USD at 21:30 MT time.
- Australian jobs data (Thu, 4:30 MT (1:30 GMT)) – The employment change is expected to increase by 15.2 thousand jobs, while unemployment change will likely remain at the same level of 5.2%. Higher-than-expected employment change and the lower-than-expected unemployment rate will be positive for the aussie.
- The monetary policy summary by the BOE (Thu, 14:00 MT (11:00 GMT)) – The interest rate is forecast to remain at the same level of 0.75%. It is recommended to pay attention to the tone of the statement. Hawkish comments will push the GBP up.
- Crude oil surged after the attack on the Saudi Arabian production facility over the weekend. An attack affected 5% of global crude output. Today, US president Donald Trump announced that he would release US emergency supplies to pull the oil prices down. In addition, oil producers said that there were enough stocks stored up worldwide. However, the fresh attacks pushed prices of WTI and Brent back to their May’s levels.
- US and China trade representatives will meet on Friday. The goal of the meeting will be to discuss the possibility of an interim trade deal. We expect risk sentiment to be affected.
- The UK Prime Minister Boris Johnson has had a meeting with the president of the European Commission Jean-Claude Juncker today, where they agreed that Brexit talks must intensify.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.
Jump in to know the key market events and trading ideas for this week!
The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.