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Markets are mixed as a new variant of the Coronavirus is causing chaos ahead of the holiday season.
Week starting 21-12-2020
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
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