Forex Today: US stimulus and coronavirus to keep driving financial markets

FXStreet Team FXStreet

Here is what you need to know on Monday, January 25:

The market’s mood soured on Friday, with global indexes closing mostly in the red. Concerns gyrated around US further stimulus and covid. Major pairs were unable to attract investors, ending the week within familiar levels.

UK Prime Minister Boris Johnson said that early studies suggest that the new coronavirus strain developed in the country could be up to 30% more deadly than the original one. Also, the South African strain shows resistance to antibodies from the original virus, which could put at doubt vaccines’ effectiveness.

In the US, President Joe Biden’s proposed $1.9 trillion stimulus package faces opposition within his own party, as at least tow Democrat lawmaker said they would oppose to another relief package.

EUR/USD closed the week with gains around 1.2170, while the GBP/USD pair settled in the red at 1.3680. The USD/JPY pair finished with a doji for a second consecutive week. Commodity-linked currencies were also unchanged for the week against the greenback.

Gold prices were up to $1,875 a troy ounce, to settle at $ 1,855. Crude oil prices saw little action these days, with WTI trading at $52.00 a barrel.

The upcoming week will bring the preliminary estimate of the US Q4 Gross Domestic Product, while the US Federal Reserve will have a monetary policy meeting. Both events may bring financial markets back to life.

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EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.