The U.S. Dollar is trading at its strongest level overall since September 2020 according to the Bloomberg Dollar Spot Index.
Overview
COVID is wreaking havoc across Europe as its resurgence is forcing lockdowns in countries such as Austria and Germany may soon be next. Indeed, this week is closing with a tremendous amount of worry over how the medical struggles we have been in globally seem to have no end.
Although some Fed governors made statements regarding the need to wait before tightening, the mention by Atlanta’s Raphael Bostic that a rate hike could come as soon as the summer of 2022 only aided the buck further.Also making things look better for the U.S. than the rest of the world, the House of Representatives is set to pass President Joe Biden’s infrastructure bill. We shall see how markets digest the potential for another slowdown period because of the coronavirus.
What to Watch Today…
- No major economic events scheduled for today
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EUR
The shared currency has reached a fresh 17-month low as the situation in the ancient continent worsens regarding COVID infections. The resurgence in central Europe in particular has been very worrisome, just a week after other regions started thinking about lifting minor safety guidelines and restrictions. Much of the analysis indicates that the stall in the vaccination campaigns in various nations is materializing into this problematic moment.
Naturally, we have no vision as to how this will play out or for how long. The high uncertainty will keep Euro down, we believe, for now.
GBP
Pound has also been thrown into deeper negative territory as the globe digests news of COVID’s rampant return. Sterling remains around its worst levels of the year regardless of a good indication that Retail Sales is picking up steam after some contractions. While the Christmas holiday shopping season is exciting, trade matters over Northern Ireland customs, and this wave of disease is crushing any possibility of consistent Pound gains.
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