Markets are mixed as a new variant of the Coronavirus is causing chaos ahead of the holiday season.

Weekly market report 21 December 2021

Week starting 21-12-2020


USD

  • Last week the US Dollar soured on the back of risk-off sentiment and record-breaking Covid-19 hospitalisations, infections and deaths.
  • Fortunately for the greenback, the USD is bouncing back slightly on the back of a new strain of the Coronavirus being discovered.
  • This week, risk sentiment will impact the markets along with the ongoing fight for a US stimulus package.
  • Apart from that, the durable goods orders for November are expected to rise by 0.6%, while both personal spending and income should fall.

EUR

  • It was a mixed week for the Euro as Brexit negotiators crept closer to a deal, with UK fisheries still the major tipping point.
  • Rising Covid-19 cases in larger European economies is starting to take its toll on the single European currency as France, Germany and Italy consider harsher lockdown restrictions.
  • The GfK consumer confidence for January should fall from -6.7 to -9.2 when it is released on Tuesday.
  • All eyes remain on Brexit and the ongoing debacle of whether a deal will be made by the end of the year.

GBP

  • The British Pound took hits last week as Brexit trade talks stalled somewhat.
  • The UK is nearing its exit from Europe and without a deal it could pose massive problems for businesses inside the UK.
  • Brexit talks are likely to drive the market along with any updates on the mutated strain of Coronavirus found inside the UK.
  • Current account data is all we have in this shortened trading week as the UK’s daily infections continue to rise.

ZAR

  • The South African Rand finally broke through key resistance levels as risk sentiment rose, pushing the ZAR higher.
  • President Cyril Ramaphosa chose to increase lockdown measures in some parts of the country, as we enter the festive period and South Africa begins to grapple with a second wave of the virus.

AUD

  • The Aussie Dollar ended last week in the green as the AUD looks to end 2020 off on a good note.
  • Aussie Dollar bulls are likely to face a few more hurdles going into the New Year with the current trade war with China as Chinese authorities put restrictions on beef, wine and other agricultural exports.
  • Iron ore exports are looking vulnerable as China begins excluding Australian ore producers and make exporting the goods far more costly for the land Down Under.

NZD

  • The New Zealand Dollar has been tipped to achieve a three-year high before the end of the year, as it lags just behind the Norwegian Krone and Swedish Krona in the developed world currency.
  • The Reserve Bank has cut New Zealand’s cash rate to 0.25% and released its first quantitative easing programme, as talks of negative interest rates limit the Kiwi Dollar’s strength.
  • With an empty docket on the economic calendar, the NZD will be taking cues from risk sentiment and Covid-19 cases.

  • Contact one of our consultants at forex@sableinternational.com or give us a call on +44 (0) 20 7759 7554 to get started on everything foreign exchange related.

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