The dollar trades sideways this week; equity markets lack direction as well. Today’s announcement of new fiscal expansion plans by the president-elect Joe Biden seems to be the most probable trigger of higher volatility.
The investors are rather uninterested in impeaching Donald Trump, who seems to be a figure of the past from the market perspective. Political chaos in Italy prevents the EUR/USD pair from settling above the 1.22 mark. The USD/JPY exchange rate hovers around 104.00, and the GBP/USD clings to recent gains. 1.37 remains exposed after governor Bailey rejected the idea of an imminent introduction of negative rates by the Bank of England.
In the emerging markets space, the zloty underperforms as the National Bank of Poland officially introduced FX interventions to its toolbox. The UR/PLN pair should thread water above the 4.50 boundary as expectations of a solid GDP rebound and massive current account surplus limit the downside. The Mexican peso and the Russian ruble are top performers this week on the back of recent crude oil benchmarks advances.