The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
Upside hopes for the GBP?
The British monthly GDP is announced on Friday at 09:00 MT time.
Instruments to trade: EUR/GBP, GBP/USD, GBP/JPY, GBP/CHF
In December, Rishi Sunak, Chancellor of the Exchequer, said that the British economy hasn’t seen an economic crisis like the current one in the last 300 years. Brexit had its impact but has never been the main driver: fundamentals are what matters. And fundamentals are hardly positive for the UK at the moment, in most aspects of its economic well-being. The labor market is slowly picking up, but the overall state of affairs is quite difficult. Ultimately, it is all reflected in the country’s output: if it is lower than expected, it may press hard on the GBP.
- If the data is better-than-thought, the GBP will be boosted.
- Otherwise, it will fall.
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 US dollar’s weakness offered a boost to emerging-market currencies and oil.