UK Preliminary Quarterly GDP is out on Thursday at 09:00 MT time.
Euro and pound demonstrate multi-week minimums as greenback is still firm
On Thursday, the common currency and the UK pound headed south to multi-week minimums versus the firmer greenback because dismal economic data out of the euro zone as well as fears over Brexit put pressure on market sentiment.
Eventually, the currency pair EUR/USD tumbled by 0.1% concluding the trading session at 1.1249, which appears to be the weakest outcome since mid-November. It occurred because of data disclosing that Germany’s GDP stood still in the fourth quarter, following a 0.2% tumble in the previous quarter.
It means the euro zone’s leading economy successfully dodged a technical recession, although it hasn’t managed to expand since June. In fact, the data underlines hopes that the ECB will still be highly accommodative in 2019.
Demand for the US currency persisted after data indicating sustained strength in core American inflation.
While headline American inflation demonstrated its weakest tempo for 1-1/2-years in January, investors closely watched the core price indicator that was soaring for the third month in a row, backing the evergreen buck.
Earlier this year the evergreen buck was impacted by the Fed’s shift to a cautious policy stance. Nevertheless, the latest data hinted that the US major financial institution will require staying vigilant on pricing pressures even as it adjusts to increased surge risks.
The UK currency was on the back foot. The currency pair GBP/USD dipped by 0.14% ending up with a one-month minimum of 1.2824 ahead of a parliamentary vote later in the day on British Prime Minister Theresa May's plan for a deal with the European bloc on the terms of its departure from it. The United Kingdom is expected to depart from the European Union on March 29.
Versus the Japanese yen the evergreen buck was intact, with USD/JPY showing 111.03.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
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.