Thanks to Economic data, covid 19 news, and US economic recovery stimulus, the riskier assets performed poorly over the week. The continued spikes in covid 19 related deaths amid a much lower vaccination rate added more support to the safe-haven currencies. Here is what happened at the top forex news to the g7 fx currencies.
At the end of the week, a massive sell-off left the riskier assets in the red as traders went on risk aversion measures. The risk aversion measures were in response to Coronavirus pandemics worries and Biden’s stimulus package market reaction.
The Fundamentals
Over the week, several fundamentals affected the performance of the g7 currencies in the forex market.
Coronavirus News
Throughout the week, continued spikes in coronavirus cases created more worries in many countries. And to make things worse, the coronavirus mutated into four different variants. The new variants spread fast and have resulted in escalated deaths.
The coronavirus resurgence caused economies to tumble amid the reintroduction of lockdown measures. Globally, the covid 19 confirmed cases hit 95m by the close of the week. More countries purchased, approved, and administered the coronavirus vaccines in efforts to combat the deadly virus.
US Politics
On Wednesday, some republicans joined the US house democrats and voted to push Donald Trump’s impeachment. According to top forex news, the impeachment came over the United States Capitol’s storming sparked by Trump’s speech that incited Insurrection leading to five deaths and scores injured.
Just days before Trump vacates the White House, he went down the books of history as the first President to be impeached twice. On Thursday, US President-elect Joe Biden unveiled a $1.9trillion covid 19 rescue package dubbed “The American Rescue Plan.” The plan targets businesses and households hit by the pandemics.
Economic Data
Except for New Zealand, Switzerland, and Canada, all other g7 countries had economic data that provided direction for their currencies. China also posted improved economic data, which boosted the commodity-related assets such as the Australian Dollar.
Oil Prices
Supported by positive sentiments, oil prices improved slightly by 0.23% to close at 52.36%. The upbeat mood of oil prices leveraged the riskier assets but was not significant to pull them out of the reds zone.
Economic Review and Performance of the G7 Currencies
Table: Performance summary of the g7 currencies.
| Currency pair | 11th January | 17th January | average | Percentage change | remarks |
| USD | 90.442 | 90.754 | 90.362 | 0.767 | increase |
| GBP/USD | 1.3514 | 1.3586 | 1.3617 | 0.1696 | increase |
| EUR/USD | 1.2149 | 1.2078 | 1.2149 | 1.1458 | drop |
| USD/CHF | 0.8902 | 0.8907 | 0.8886 | 0.5986 | increase |
| USD/JPY | 104.24 | 103.87 | 103.90 | 0.06 | increase |
| USD/CAD | 1.2783 | 1.2732 | 1.2710 | 0.3863 | increase |
| AUD/USD | 0.7756 | 0.7702 | 0.7735 | 0.7346 | drop |
| NZD/USD | 0.7160 | 0.7138 | 0.7180 | 1.5 | drop |
USD News Update
For the second consecutive week, the greenback continued in an upward trend. The Dollar increased by 0.18% in the previous week and strengthened by 0.75% in the second week of January.
Without significant global catalysts, high optimism on US fiscal stimulus significantly pressured the performance of the Dollar. Also, the positive sentiments fueled by the coronavirus vaccine approval checked the upbeat of the greenback.
On the economic data top forex news, the first half of the week was quiet except for a few data. In the week, inflation remained steady at 1.6% while job openings dropped, and consumer prices increased by 0.4%.
In a busy second half of the week, key economic data included the weekly jobless claims, consumer sentiment figures, and retail sales. Jobless weekly claims improved from 784k to 965k. On a downward spiral retail sales slumped by 0.7%, and consumer sentiment figures reduced from 80.7 to 79.2.
Despite the continued coronavirus vaccinations, sadly, covid 19 related fatalities increased sharply over the week. Trump’s impeachment and US demonstrations also affected the greenback.
On the fiscal usd news update, Fed Chair Powell indicated that as long as inflation remains low, market rates will remain unchanged for quite a while. He further noted that the bond purchases program would continue.
GBP/USD Nudge Upwards
Over the week, the sterling pound reversed its previous week’s loss and strengthened by 0.16% to 1.3590 against the Dollar. Previously, it had dropped by 0.76% to 3568. The cable started the week very well, only to lose the gains by 0.72% on Friday.
In a relatively economically busy week, mixed economic data provided direction for the gbp usd currency pair. Retail prices went upwards by 4.8%, but house prices dropped marginally from 66% to 65%.
More economic top forex news came at the end of the week but failed to support the sterling pound. While manufacturing production improved by 0.7%, industrial production dropped by 0.1%, falling below earlier predictions. GDP figures painted a grim picture.
The UK’s economy contracted by 2.6% and could be headed for a double-digit recession. On the covid 19 news, an increase in vaccination rate in the UK overshadowed the negative sentiment on the impending lockdown measures.
EUR USD Market News
By the close of the week, the euro lost 1.11% to trade at 1.2082 to the Dollar. Previously, it had increased marginally by 0.02%. Significantly, continued spikes in new coronavirus cases and low vaccination rates across EU member states featured heavily in eur usd market news.
The Eurozone industrial production improved by 2.5% following a previous 2.3% increase. However, trade data disappointed, dropping from 30 bn to 25.8bn euros. Looming lockdown measures and coronavirus mutations added more pressure on the euro. However, the ECB’s financial policy had a muted effect on the euro’s performance.
USD CHF Latest News
There was no direct catalyst from Switzerland to provide directions for the usd chf latest news, thus leaving its performance to covid 19 pandemics and US politics.
A looming lockdown measure and coronavirus continued spikes top forex news pulling the Swiss franc. The new mutations made things worse for the Switzerland currency.
By the end of the week, the Swiss franc weakened by 0.5986 to exchange at 0.8907 tp the greenback.
USD CAD Forex News
There was no economic data from Canada; thus, Lonnie’s performance was left to coronavirus pandemics, US politics, and crude oil prices. Worries on covid 19 spikes and its new mutants pulled down the Lonnie.
The US fiscal stimulus package also negatively affected the usd cad forex news. Early in the week, the Bank of Canada business outlook survey had a muted impact on Lonnie. In the week ending 17th January, the Canadian Dollar dropped by 0.24% to exchange at 1.2732 to the usd.
In the week before, the Loonie had grown by 0.2% to close at 1.2702.
AUD/USD Bearish Week
The Australian Dollar went on a bearish run following strong gains in the previous week. Driven by risk aversion measures, the Australian Dollar dropped by 0.70% to 0.7703.
The continued spikes in the coronavirus new cases, lockdown measures reintroduction, and the US politics pushed down the Aussie dollar. Coronavirus mutations also added to the weakening of the Aussie dollar.
In a quiet week on the economic diary, few economic data provided direction for the Aussie dollar. Encouragingly, Retail sales improved uplifted by easing of containment measures in Victoria. Sales figures went up by 7.1%, following a previous 1.4% increase.
On the top forex news, upbeat trend building permits increased by 2.6% while new home loans surged by 5.5%. Improvement in China’s trade also supported the Aussie dollar.
NZD/USD Biggest Loser
Top forex news indicates that there were no economical materials to provide direction for the kiwi dollar. This left its performance to covid 19 pandemics and US politics to be the week’s biggest loser.
At the end of this week, the Kiwi Dollar went southwards by 1.51%, closing at 0.7133. Forex traders embarked on risk aversion measures triggered by covid 19 spikes, mutations, and US politics. This significantly weighed on the kiwi dollar.
For the Japanese Yen
In a relatively quiet week, the Japanese yen reversed its previous week’s loss of 0.72% and strengthened dismally by 0.09%. Core machinery orders significantly affected the Japanese yen. Earlier, Economists had projected a 6.2% drop, but the orders rose by 1.5%.
The data, though, had little impact on the Yen’s top forex news. However, it was covid 19 news and US politics that primarily supported the Yen. Covid 19 increased and renewed lockdown measures primarily pushed the Yen downwards.
Conclusion
Top forex news shows that the American Dollar gained against all other g7 currencies. Covid 19 pandemics, economic data, and US politics primarily boosted the greenback.
Will the American Dollar continue to enjoy a good performance in the coming weeks?
Read Also: Forex Market Predictions from 4th to 10th January 2021
