Biden Tussles With Relief Package

February 2, 2021

Greenback Looks Firm on ISM

The dollar index closed 0.53% higher on Monday after finally maintaining its grip above the 91 handle.

ISM figures saw manufacturers growing a bit slower in January. However, it also showed that companies are still expanding rapidly and anticipating a stronger economy in 2021.

In the meantime, any further movement in the dollar appears propped up by investors’ doubts surrounding the imminent debate around fiscal stimulus by US policymakers.

As the President attempts to build momentum, some Republicans want Biden to lower his $1.9tn pandemic aid to $618bn.

Euro Subdued on Unemployment and PMI Data

The euro fell 0.58% lower yesterday as it crashed through the 1.21 level.

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Unemployment data stood at 8.3% as the number of people out of work edged up by 55 thousand from the previous month to 13.61 million.

PMI for the eurozone manufacturing sector fell, as the rate of expansion was down since December.

Not a great start for 2021.

Sterling Fails to Hold on

The pound edged 0.32% lower on Monday as it was unable to keep hold of the 1.37 handle.

PMI readings showed the UK manufacturing sector slowed sharply at the start of 2021. Output growth eased and new orders fell due to covid-19 restrictions.

Transport delays, especially at ports, following the end of the Brexit transition period also led to temporary supply chain disruptions.

In addition, a door-to-door testing blitz is getting underway in a bid to find every single case of the latest coronavirus variants in England.

Indices Up as Sentiment Takes a Shift

Wall Street stocks closed higher on Monday as market participants shook off anxiety stemming from last week’s speculative retail trading mania.

The Nasdaq was the main front runner, closing 2.55% higher.

Investors now look at more corporate earnings this week, with the likes of Alphabet, Amazon, Exxon, and Pfizer set to update the market on their latest quarterly performances.

Bulls Look to Reclaim $1900

Gold moved 0.70% up yesterday, bouncing off the $1850 psychological handle.

However, the yellow metal looks to bear the burden of the greenback’s latest recovery amid a risk-on mood.

We now wait to see if there will be receding market interest in the earlier retail rush in silver, as this could favor gold sellers.

WTI Settles Higher as Cuts Take Effect

Oil closed 3.5% higher yesterday after closing the previous week with very little change.

Major producers showed they were cutting crude output in line with their commitments on restraint.

The production cut agreement reached in January by OPEC and their allies took effect, including Saudi Arabia’s pledge to unilaterally reduce output by 1 million BPD.

How much further can oil jump?

By Orbex