Stronger than expected economic reports drove the U.S. dollar higher
against all of the major currencies. Theres no question that of the G3
currencies (USD, EUR and JPY), the U.S. is leading the recovery, and
data is beginning to show the benefits of a smooth coronavirus vaccine
rollout. Seventy percent of Americans 65 or older have received at least
one COVID-19 vaccine dose, with more than a third of the overall adult
population receiving their first jab. Businesses are reopening and
economic activity is accelerating. As a result, jobless claims fell to
684,000, its lowest level in more than a year. Fourth quarter GDP growth
was also revised up to 4.3% from 4.1%. The U.S. economy is still a long
way from normal, but the numbers show that it is moving in the right
direction. With more Americans getting vaccinated every day, further
improvements are likely. Personal income and spending numbers are due
for release tomorrow.To get more news about [url=https://www.wikifx.com/]WikiFX[/url], you can visit wikifx.com official website.



　　While investors bought U.S. dollars, stocks did not turn higher
until after the London close. The reluctance can be partly attributed to
Federal Reserve Chairman Jerome Powell‘s comments on NPR’s Morning
Edition. For the first time since the pandemic began, he talked about a
future with less stimulus. Powell said: “As we make substantial further
progress toward our goals, we‘ll gradually roll back the amount of
Treasuries and mortgage-backed securities we’ve bought.” However, all of
this would be predicated on a strong recovery, which is ultimately
positive for U.S. assets and explains why equities recovered their
losses to end the day up.



　　Fewer restrictions and more vaccinations stand in stark contrast
with Europe, where fresh lockdown measures were announced this month for
Germany, France and Italy. Compared to the U.S., only 9% of the German
population have received their first shot. We have been bearish euros
all month, and that will remain true regardless of tomorrows IFO report.
German business confidence may be bolstered by the stronger PMIs, but
confidence in the region will be restrained until the government gets
better control of the latest wave. ECB member Luis De Guindos sees
Eurozone GDP contracting in the first half of the year. EUR/USD dropped
below 1.18 for the first time since November and it may not find support
until the 50-week SMA at 1.17.



　　Sterling, on the other hand, snapped a five-day decline to end the
day higher against the U.S. dollar. The UK is in a very difficult
position with COVID-19. Like the U.S., its vaccine rollout program has
been quick and aggressive. More than 50% of its adult population
received their first shot, and this will pay dividends for the economy.
Retail sales are due for release on Friday, and we are looking for a
solid increase after last months sharp decline.



　　The Australian and New Zealand dollars erased earlier gains to end
the day lower against the greenback, whereas the Canadian dollar started
the day under pressure. Although New Zealand‘s trade balance returned
to surplus, investors cannot look past the government’s recent steps to
curb housing price increases. No data was released from Canada, but oil
prices resumed their slide and, more importantly, Canadas Supreme Court
ruled the carbon tax law is constitutional. Reducing greenhouse gas
emissions is a top priority for the government and this tax, which is
bad for the industry, is something it would have had to deal with
eventually.