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Economic Data Puts the Pound and the Dollar in the Spotlight

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Bob Mason
·3 min read
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Earlier in the Day:

It’s was another quiet start to the day on the economic calendar this morning. There were no material stats to provide the majors with direction early in the day.

The lack of stats left U.S stimulus chatter and COVID-19 news in focus.

For the Majors

At the time of writing, the Aussie Dollar was up by 0.01% to $0.7714, while the Kiwi Dollar was down by 0.06% to $0.7198.

The Japanese Yen was down by 0.02% to ¥103.77 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. While it’s a busy week on the economic calendar, there are no material stats due out of the Eurozone to provide the EUR with direction.

The lack of stats will leave the EUR in the hands of COVID-19 news updates from the start of the week.

With the EU facing a marked shortfall in vaccine supplies, vaccination rates will likely remain on the low side.

A continued spike in new COVID-19 cases may force governments to enforce stricter restrictions to curb the spread of the virus. Any such moves would weigh further on the EUR.

At the time of writing, the EUR was up by 0.03% to $1.2143.

For the Pound

It’s a relatively busy day ahead on the economic calendar. December claimant count and November employment change and unemployment rate will be in focus.

With the UK reintroducing lockdown measures in late December, expect the claimant count to have the greatest impact.

Wage growth figures for November are also due out but would likely have a muted impact on the Pound.

Away from the economic calendar, COVID-19 infection and vaccination rates will also influence. A continued rise in vaccination rates and a fall in infection rates would be Pound positive.

Once concern will be the more infections and possibly more deadly strains and whether existing vaccines are effective.

At the time of writing, the Pound was up by 0.01% to $1.3676.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. January consumer sentiment figures are due out later today.

Expect Dollar sensitivity to the numbers. While stimulus hopes are positive, the continued rise in new COVID-19 cases and dire labor market conditions are negatives.

Vaccination rates have been on the rise over the last week. Coupled with a sizeable stimulus package, this should support a more optimistic outlook towards the economic recovery. Any negative updates from Capitol Hill would test market risk appetite.

On Monday, the Dollar Spot Index rose by 0.17% to 90.391.

For the Loonie

It’s a particularly quiet day on the economic data front, with no material stats to provide the Loonie with direction.

COVID-19 news from China and the U.S and chatter from Capitol Hill will be the key drivers on the day.

At the time of writing, the Loonie was flat at C$1.2740 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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