US economy on a solid footing, coronavirus still top threat – Reuters Poll

Anil Panchal FXStreet

As per the latest Reuters Poll of over 100 economists, “The US economy will grow at its fastest annual pace in decades this year and outperform most of its major peers, with the outlook upgraded sharply.” It should, however, be noted that the survey also mentioned the COVID-19 surge as the biggest risk over the next three months.

“There was a new wave of optimism among economic forecasters predicting a boost to economic activity from the $1.9 trillion pandemic relief package already passed and also from U.S. President Joe Biden's proposed $2 trillion-plus infrastructure plan,” the poll added.

The survey also raises expectations of 6.2% yearly growth, versus the International Monetary Fund's latest projection of 6.4%, while suggesting the “fastest annual expansion since 1984.”

While the news should exert further downside pressure on the US dollar, due to its safe-haven status, the pre-ECB trading lull seems to play its role of late.

Read: European Central Bank Preview: Five reasons for Lagarde to lift the euro

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD stays below 1.1850 after dismal German sentiment data

EUR/USD stays in negative territory below 1.1850 in the second half of the day on Tuesday. Renewed US Dollar strength, combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.

GBP/USD falls toward 1.3550, pressured by weak UK jobs report

GBP/USD remains under bearish pressure and extends its decline below 1.3600 on Tuesday. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month and making it difficult for Pound Sterling to stay resilient against its peers.

Gold recovers modestly, stays deep in red below $4,950

Gold (XAU/USD) stages a rebound but remains deep in negative territory below $4,950 after touching its weakest level in over a week near $4,850 earlier in the day. Renewed US Dollar strength makes it difficult for XAU/USD to gather recovery momentum despite the risk-averse market atmosphere.

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.