Review of the dollar, euro, pound, yen, aussie and gold prices for January 20, 2021


The European currency demonstrates a slight increase against the US dollar during today’s Asian session, developing the “bullish” signal that formed the day before. The single currency is supported by corrective sentiment on the dollar, as investors await Joe Biden’s inauguration scheduled for today. Macroeconomic statistics from Europe released on Tuesday were mixed. Thus, the harmonized consumer price index in Germany, as expected, decreased by 0.7% y / y in December, which coincided with the dynamics of the previous period. On a monthly basis, the indicator added 0.6% m / m, which also came as no surprise. In turn, the data from the ZEW study turned out to be better than analysts’ forecasts. The index of economic sentiment in the eurozone in January rose from 54.4 to 58.3 points against the forecast of a decrease to 45.5 points. Data from the ZEW on business sentiment in Germany in January reflected an increase in the index from 55 to 61.8 points, exceeding the forecasted 60 points.


The British pound is strengthening against the US dollar during today’s Asian session, actively testing the 1.3650 level for a breakdown. The pound is again taking advantage of the weakness of the American currency, which is prone to corrective sentiment after a short period of growth. Investors are not confused by the epidemiological situation in the country, which remains difficult despite a very active vaccination campaign. Today the focus of the market participants will be a block of macroeconomic statistics from the UK on the dynamics of retail prices and the consumer inflation index in December. Despite the remaining restrictions in the country, the consumer price index is expected to accelerate in December from + 0.3% y / y to + 0.5% y / y, which should provide significant support to the instrument.


The Australian dollar is significantly strengthening against the US currency in trading this morning session, testing strong resistance at 0.7700 for a breakout. The reason for the resumption of growth in the instrument is largely corrective sentiment for the American currency, which is weakening before the inauguration of Joe Biden and reacts to the mixed financial statements of the US banking sector. In turn, the macroeconomic statistics from Australia exerted some pressure on the currency pair on Wednesday. Thus, the consumer confidence index from Westpac in January fell by 4.5% m / m after rising by 4.1% m / m over the previous period. Investors also reacted very coolly to the decision of the People’s Bank of China to once again keep the key interest rate at 3.85%. At the same time, the indicator of direct investments in the Chinese economy in December decreased from 6.3% y / y to 6.2% y / y with the forecast of growth to 6.9% y / y.


The US dollar is falling against the Japanese yen in trading in today’s Asian session, offsetting a moderate rise in the instrument on the eve. The positions of the American currency are weakening practically along the entire front of the market, in response to the speech of Janet Yellen, who, we recall, is the main candidate for the post of US Treasury Secretary under President Joe Biden. Speaking in the Senate, Yellen noted that the United States is not going to engage in currency manipulation in order to keep the US currency at low levels that would be convenient for the country’s export sector, and also does not intend to fight similar actions of other countries. At the same time, Yellen believes that a number of sanctions against China should be preserved. In general, the market perceived the statements of the candidate for the post of the Minister of Finance as hints of the country’s return to the “strong dollar policy”, which contrasts sharply with the previous course of Donald Trump, who has repeatedly called for a decrease in the value of the American currency.


Gold prices are rising markedly during today’s Asian session, updating local highs since January 15. The instrument is actively testing the level of 1850.00 for an upward breakdown. A noticeable pressure on the position of the American currency was exerted by the speech of the candidate for the post of US Treasury Secretary Janet Yellen, who spoke in favor of a gradual return of the “strong dollar policy”. In any case, it seems that the Joe Biden administration will not engage in artificial weakening of the national currency, as well as prosecute other countries for such actions. In addition, investors are awaiting Biden’s inauguration today, and are also looking forward to quick decisions on the announced $ 2 trillion support package for the US economy.

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