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On Friday, the evergreen buck rallied to a 10-day maximum after American consumer prices data disclosed a build-up of inflation pressure, which would enable the Federal Reserve to have rates lifted up to four times in 2018.
Estimating the US currency’s purchasing power against its six key rivals, the USD index managed to tack on by up to 0.13% being worth 94.69.
It’s evident that this week the evergreen buck derived benefits from the trade clash worries that showed up earlier. It definitely backed the currency, as a safe-haven asset.
The American economy has demonstrated that it’s in a good shape and Treasury revenues have tacked on. Needless to say, these crucial factors have greatly underpinned the evergreen buck.
On Wednesday, a trade clash between America and China intensified because the US government uncovered its firm intention to impose 10% duties on $200 billion worth of China’s products.
The tit-for-tat duties have powered concerns that the world’s two leading economies could spark a fierce trade conflict that market participants fear could affect global surge.
As a matter of fact, the currency pair USD/JPY managed to inch up by 0.12% being worth 112.65. This week the major American currency has soared approximately 2% versus the Japanese yen, normally purchased as a safe haven in times of market turmoil and political tension.
At the same time, the currency pair AUD/USD ascended about 0.07% being worth $0.7413 because Friday’s data disclosed that China's dollar-denominated exports soared a higher-than-anticipated 11.3% in June from 2017.
Besides this, the UK currency headed south to a one-week minimum because American leader Donald Trump warned British Prime Minister Theresa May that this soft Brexit proposal of hers could have an adverse impact on the trade deal with the United States of America.
During the daily press briefing of Andres Manuel Lopez Obrador, it was announced that Mexico will receive 1.4 million doses of the vaccine by the end of January. Is that optimistic enough for the peso?
The US unemployment claims are announced on Thursday at 15:30 MT time.
The Canadian monthly GDP is announced on Wednesday at 15:30 MT time.
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.
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