Tuesday 26th January 2021
IFX market report
Market sentiment dampened on Monday as US-China relations begin to sour under the new Biden administration. Whitehouse spokeswoman Jen Psaki said that Biden is evaluating tariffs on Chinese goods and wants to coordinate future steps with allies on how they can handle economic pressures from the CCP government. Psaki went on to add that “the president is committed to stopping China’s economic abuses”. Biden’s new Trade Representative, Katherine Tai, also gave a hawkish outlook on China of recently, claiming that the US is “face stiffening competition from a growing and ambitious China… whose economy is directed by central planners who are not subject to the pressures of political pluralism, democratic elections or popular opinion”.
GBPUSD started the week off well at 1.3707 and quickly came under selling pressure in the late morning. After depreciating early in the session, the pair struggled to get back past 1.37, closing Monday finally at 1.3666.
GBPEUR on the other hand was able to finish above where it opened. With little price action, the pair opened at 1.1257 and closed 1.1260.
EURUSD depreciated over the course of Monday’s session – opening at 1.2175 and closing at 1.2137.
On the COVID front, Matt Hancock confirmed yesterday that there are “early signs” that measures were working in the UK, but it is “difficult to put a timeline” on the right “moment to ease up”. A further 592 people have died in the UK (within 28 days of a positive COVID-19 test) and another 22,195 positive cases have been recorded, according to Monday's government figures.
It’s a busy day for the UK and US regarding economic releases. At 07:00, the UK figure for Employment Change in the October came out better than expected at -88k, as opposed to -100K. Average UK Earnings was also released, coming in at 3.6% and Unemployment is up by 0.1% on the previous figure. The main release for the US today will be the CB Consumber Confidence, coming out at 15:00.