January 18-22, 2021. Formation of new trends

2021-01-16

In the coming week, the future monetary policy of the key world economies: China, Japan, Canada and the European Union will be determined. This introduces a significant element of uncertainty in forecasting trends in major currencies. The governments and banks of these states probably will not change something at the beginning of the year. The unchanged rates contribute to the rise in major currencies and the fall of the dollar.

Against the US currency are traders’ expectations of the launch of the Fed’s printing press after the inauguration of Biden, who promised US citizens and businesses a $ 1.9 trillion aid package. The inauguration of the new president will also be a factor of uncertainty for the Forex market. The storming of the Capitol was one of the reasons for the growth of the dollar index, traders will buy this premium back if Biden’s inauguration passes without incident.

The growth of major currencies can lead the British pound, which is in demand in Forex after the statements of the head of the Bank of England about the long horizons of plans to introduce negative rates. New performances by Andrew Bailey this coming week will reinforce this trend.

The described scenarios can be reversed by corporate reports and indicators of American unemployment. Failure of these banks or the release of weekly applications for benefits above 1 million, will lead to the flight of investors into dollar caches and US Treasury bonds.