Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed


Here is what you need to know on Friday, January 15:

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. US retail sales, consumer confidence, and other figures compete with coronavirus figures for impact on markets. 

Fiscal stimulus: President-elect Joe Biden presented a $1.9 trillion relief package as expected. The scope of the plan – the first of a two-pronged approach – was already priced in by markets. Moreover, the incoming Commander-in-Chief talked about people "paying their fair share" and investors are concerned about rate hikes. It is also unclear how much of the plan can be approved as Democrats have thin majorities in Congress.

Monetary stimulus: Jerome Powell, Chairman of the Federal Reserve, clarified that rate hikes are not coming anytime soon, nor is tapering of bond-buys. US Treasury yields are on the back foot, weighing on the greenback until the market mood soured.

Gold has been clinging to $1,850, edging higher amid prospects of more fiscal and monetary stimulus.

US data: Weekly jobless claims badly disappointed with a leap to 965,000, the highest since the summer, and a result of coronavirus, which continues raging in the US. The focus now shifts to the consumer. Retail Sales figures for December are forecast to have remained mostly unchanged after falling in November. 

US Retail Sales December Preview: Sales will track job losses

Industrial output has likely continued its upward march, as the sector is less impacted by the virus. Finally, the University of Michigan's preliminary Consumer Sentiment Index statistics for January will likely show a small decline. 

See US Consumer Sentiment Preview: Expectations look rich, dollar could receive a (second) blow

UK: Britain is set to further accelerate its vaccination campaign next week. Prime Minister Boris Johnson is under pressure from a group of MPs pushing to loosen the lockdown. The recent measures are beginning to bear fruit, as cases are declining. 

Virus strains: Britain banned travel from South America and Portugal amid concerns about a new, Brazilian variant. Scientists are unsure if current immunizations are efficient against this new strain, which has ravaged the Amazonian city of Manaus. 

Coronavirus: Statistics, herd immunity, vaccine calendar and impact on financial markets and currencies

Europe: France has announced an early nighttime curfew to enhance social distancing and curb the spread of the virus. German Chancellor Angela Merkel is mulling tightening restrictions as cases and deaths remain elevated. Spanish regions are also imposing new limits in the wake of a post-holidays wave. 

Merkel's CDU party will choose a new leader over the weekend, with moderate Armin Laschet competing with more populist Friedrich Merz. Another candidate is Norbert Röttgen, which could be a compromise one. The country's general elections are due only in September.

Cryptocurrencies: Bitcoin has been retreating from $40,000, suffering a down day after advancing on Thursday. 

Five factors moving the US dollar in 2021 and not necessarily to the downside

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 

EUR/USD News

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.

GBP/USD News

Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures