Dollar Pulls Slightly After Yearly High
The dollar ended slightly lower at the start of the trading week after its ascent to 3-week highs.
The risk aversion mood remained unchanged despite positive results from the Chinese economy showing their economy expanded in Q4.
As President Trump’s final day in the White House commences, he is reportedly to issue over 100 pardons and commutations. In addition, he had also been cautioned over issuing a self-pardon by advisors, as such a move could make him look guilty.
Washington is bracing for further protests during tomorrow’s inauguration day, as further civil unrest is likely to ensue.
Stocks took a break yesterday to observe Martin Luther King Jr Day, traditionally observed on the third Monday of January.
Eurozone Heading for Double-Dip Recession
The euro closed lower for a fourth consecutive session, as it ended 0.10% down.
As the pandemic lingers on and additional measures ensue, this will spark a slower decline in activity and a wave of bankruptcies, if the government and central bank support measures do not stay in place.
Expectations are that the economy will kick off 2021 with a double-dip recession, with a second consecutive quarterly GDP contraction.
Sterling Tumbles Towards 1.35
The pound fell significantly lower yesterday, as it failed to hang onto the 1.36 ceiling.
Falling 0.10% down during the intraday session, the pair almost touched the 1.35 floor.
This comes as four million people in the UK have received their first vaccination. However, a warning has been put in place that cases could spike if the public break coronavirus rules.
Britain’s government hopes to ease some lockdown restrictions in March, but will this been a case of too little, too late as Q1 will be coming to an end.
Gold Punches the $1840 Handle
Gold lifted 0.52% higher on Monday after an intraday dip saw the commodity almost fall to $1800.
Bulls lifted the yellow metal as they look to drive risk appetite on upcoming fundamental factors this week.
US treasury secretary Janet Yellen’s testimony to Congress happens today, whilst the effect of a new incoming US President could shake the markets.
WTI Hangs On
Oil fell by 0.30% yesterday as it still bore the brunt of last week’s sell-off.
However, the black gold was slightly boosted by closing above the $52 handle, as bulls look for a swift recovery.
Rising hopes that more stimulus measures could aid economic recovery could boost oil demand in the near future.
Upbeat data from China and Saudi Arabia’s agreement to implement deeper supply cuts have kept sentiment firmly intact for oil.