Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
Domestic demand helps Germany to drive euro zone economy in the second quarter
In the second quarter sturdy household spending, soaring state expenditure as well as higher company investments managed to consolidate Germany's role as the euro zone surge engine. However, accelerating imports suggest surge came in below expectations.
Seasonally as well as calendar-adjusted GDP rallied by 0.6% on the quarter, as the Federal Statistics Office informed on Tuesday. It was modestly weaker than the consensus prediction of 0.7% in a Reuters survey.
However, the ascend rate for the first quarter was updated up to 0.7% from 0.6%, and the April-June expansion definitely marked a 12th consecutive quarter of surge.
Financial experts stress that the German economy is successfully proving its enormous power. Additionally, the ECB’s low interest rates were spurring the German economy too.
According to the Statistics Office, in the April-June period surge was mostly powered by domestic demand because households as well as state authorities enhanced their spending and companies spurred investment in equipment and buildings.
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.