Greenback Still Can’t Catch A Break, Lower v. G10

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Greenback Still Can’t Catch A Break, Lower v. G10

JANUARY 05, 2021

The U.S. dollar continues to be the whipping boy of global markets.

Overview

Despite a sell-off in U.S. equities yesterday, the greenback was not able to make much headway.  Futures show risk will rebound somewhat today, putting new pressure on the U.S. dollar.

Today is also the run-off election for two U.S. Senate seats in Georgia, although it may be a few days until a winner is declared.  While the results may influence the future of fiscal spending and risk appetite, it is unclear whether it will have a direct impact on the buck.

At 10 a.m., the ISM manufacturing print will cross the wire.  The Fed’s John Williams and Charles Evans are among the Fed speakers on today’s docket.  Friday’s Non-farm payrolls remain the biggest risk event on this week’s agenda


What to Watch Today…

  • ISM Manufacturing at 10 a.m.

View Economic Calendar

EUR  

The Euro remains firm against the U.S. dollar which is likely more of a result of dollar weakness than Euro strength.  Covid-19 continues to run rampant in Europe and Italy and Germany have extended their time frames for current curbs to business.

The common currency may have been giving a boost following German retail sales which showed an improvement of 1.9%, instead of the forecasted 2.0% decline.

GBP  

The British pound is still relatively buoyant following the post-Brexit deal, despite fresh lockdowns in the U.K. Indeed, the nation is entering its third full lockdown of the pandemic putting extra pressure on U.K. businesses.  Chancellor of the Exchequer Rishi Sunak announced 6.2 billion dollars of new support for British businesses. The plan is to give retail, hospitality, and leisure businesses one-off grants up to 9K GBP each, depending on the business size.

GBP/USD is up 0.2% today and is within a whisker of fresh 2.5-year highs.  However, the pound has trailed other G10 currencies in their march higher against the greenback.

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