Markets closed the week lower and the US Dollar resurgent. The incoming Biden administration announced plans for a $1.9 Trillion stimulus plan, including further bailout money and additional unemployment payments. This package includes bailout money for recalcitrant States, which the Republican lead Senate had previously rejected. The Democrats will have a majority in the House and Senate, but may discover the difficulty of passing legislation through the Senate. The coming week is politically huge, with inauguration of the incoming President. There are up to 20,000 troops protecting Washington so they intend to be prepared for any developments, this time.
The US Dollar found some support, with the EUR falling to 1.2050, while the GBP slipped to 1.3580. The ECB, Bank of Japan and Bank of Canada all make interest rate decisions in the coming week. There are no expected rate changes but there will be extensions to monetary stimulus, already in place. The week will be dominated by the political events in the USA but markets will look at the plethora of economic data being released, to gauge the health of global economies.
The trade exposed commodity currencies suffered a resurgent reserve, with the AUD dropping to 0.7700, while the NZD crashed to 0.7140. Negative sentiment in the markets will be reflected in the strength of the safe haven US Dollar.