Forex Today: New covid strain boosts dollar, gold shines on fiscal stimulus deal, Brexit eyed
|Here is what you need to know on Monday, December 21:
The market mood has soured and the US dollar is jumping as a new coronavirus strain in the UK triggered flight bans and heightened concerns. US lawmakers reached a $900 billion stimulus deal, boosting gold. Vaccine and Brexit headlines are eyed.
A new strain of COVID-19 is 70% more transmissible, raises the reproduction rate by between 0.4 and 0.7, and is "out of control" according to UK Health Secretary Matt Hancock. The VIU-202012/01 variant is probably not more dangerous nor vaccine-resistant.
The UK has been performing genetic sequencing more than other countries. Fear is boosting the safe-haven greenback and more information is set to emerge about the strain.
Britain announced a new restriction level, Tier 4, on London and the surroundings and several countries canceled flights to Britain, potentially causing supply-chain issues ahead of Christmas. Prime Minister Boris Johnson convenes the Cobra cabinet on Monday. GBP/USD is down by more than 1%, punished also by stalled Brexit talks.
Brexit: The EU and the UK continued trying to negotiate a trade deal also over the weekend and in the latest reports, significant differences remain, especially on fisheries. A potential EU concession on the sensitive topic has angered the sector. Brexit deliberations missed a Sunday deadline set by the European parliament.
US Stimulus: Senate Majority Leader Mitch McConnell announced that Democrats and Republicans reached a deal worth $900 billion, the second-largest in history after March's CARES act. The deal includes checks to all Americans, unemployment benefits, and aid to small businesses.
A breakthrough became possible after Senator Pat Toomey retreated from demands to curb lending powers of the Federal Reserve. The news is keeping US stock futures afloat despite concerns about the new string. A final vote is due later in the day. Gold has surged above $1,900 in response.
Vaccine: The US begins administering Moderna's jab on Monday after the Food and Drugs Administration approved it on Friday. The European Medicine Agency will likely greenlight the Pfizer/BioNTech vaccine.
Lockdowns: Ontario, Canada's most-populated province, is set to enter a significant shuttering, and the news is weighing on the loonie. Several European countries are tightening their screws, including Italy – where one patient was diagnosed with the new virus variant.
Investors are also watching the Russian hack into US federal agencies and lawsuits against tech firms. The economic calendar is light on Monday, leaving room for virus and political headlines to rock markets.
Oil prices have dropped amid concern of falling demand with WTI Crude Oil dropping under $48.
Bitcoin has topped $24,000 over the weekend and remains around that level. Tesla's Elon Musk flirted with investing in the granddaddy of cryptocurrencies over the weekend.
More Can dethroned King Dollar make a comeback? Santa's market gifts are generous but not infinite
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.