- US retail sales eyed next.
- Brexit-deal hopes brighten helping GBP/USD bulls.
- US Dollar retreats as US stimulus wait continues.
Pandemic tensions are again weighing on the risk mood as more US states try to counter the increasing COVID-19 cases. The US dollar is back in demand while Brexit optimism helped the UK pound; traders eye the US retail sales numbers.
In the US, California stopped its reopening plans in a hurry, while Iowa and New Jersey increased the restrictions as the country hit 148,000 COVID-19 cases and hospitalization went above 73,000 – a new record, on Monday.
The risk-on mood was on display yesterday as Moderna reported 94.5 Percent efficacy in its vaccine against coronavirus. Its immunization doses – under development and on trial- could withstand higher temperature for long; this is in contrast to the Pfizer/BioNTech vaccines’ reported behaviour. These pharma companies are using the novel mRNA, and other pharmaceutical companies developing a vaccine against coronavirus use the same approach.
Regarding the Brexit deal, the comments from Ireland’s Prime Minister Michael Martin that the “contours of a deal are there” triggered optimism regarding the negotiations. Traders await developments from the EU video conference on Thursday while media reports suggest the likelihood of a deal soon, helping the bulls to push up GBP/USD.
The US retail sales numbers are expected to clock 0.5 Percent rise in October – a relatively sedate growth compared to 1.9 Percent jump in September.
The US Fed Chairman Jerome Powell speech later in the day might provide clues regarding bond-buying expansion- if any. The Fed’s latest meeting has indicated more action as Chairman Powell might want the lawmakers to act.
President-elect Joe Biden called for an economic relief package while addressing the nation amidst the rising coronavirus cases in the US. The Senate picture will emerge only in January after the run-off elections in Georgia, and this means the US economy might have to wait longer for a much-needed stimulus.
German Chancellor Angela Merkel has been gunning for stricter restrictions to contain coronavirus spread but hasn’t found much success with the regional leaders. Meanwhile, Austria entered a three-week lockdown while new limits were put in place by the Swedish government.