Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
British economic surge adds in the second-quarter
The UK economy gathered just a little speed during the second quarter after nearly stalling at the beginning of the year, underpinned by the services sector as well as a flourishing film industry, as official figures disclosed on Wednesday.
Surge of 0.3% on the quarter from 0.2% in the first quarter – that’s an outcome, which is likely to cement hopes that the Bank of England will keep interest rates intact next week at their record minimum.
The outcome appeared to be i line with the median prediction in a Reuters survey of financial experts.
The previous year the UK economy gained 1.8%, thus becoming one the fastest of the world's seven key economies, ruining widespread predictions of downtime after the vote to abandon the European Union.
However, the Brexit vote provoked a huge drop in the value of the British pound, which has bolstered inflation, affecting consumers' disposable income.
The services industry turned to be the only driver of economic surge during the second quarter, backed by hotels, restaurants, and retailers, to say nothing of the UK rapidly growing film industry.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
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 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.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.