Equity markets remain nervous and volatile as January draws to an end. Abrupt shifts in sentiment spurr into FX markets, where the US dollar ends the week on the front foot.
In the last couple of days, the commodity block has emerged as a clear underperformer. This week, in the G-10 space, the Australian dollar, the Norwegian krone and the Canadian dollar have lost almost 1 pct against the greenback (the US currency). As far as the emerging markets space is concerned, the Russian ruble and the Mexican peso have recently experienced the strongest pressure.
At the same time, the EUR/USD pair threads water and trades sideways in the middle of the 1.20-1.22 range. The pound sterling tries to cling to recent gains, but the cable (the GBP/USD currency pair) cannot be sure it is headed for a weekly close above the 1.37 mark at the time of writing. The USD/JPY has soared close to the 105.00 handle. The yen trades at the lowest levels in over two months. However strong, the move has not been triggered by any fundamental developments or important headlines, and therefore, it may be hard to sustain.
Today's focus is placed on the European Medicines Agency decision on the AstraZeneca vaccine, which has aroused significant speculation. Germany informed that it would not be available for citizens older than 65. Datawise, the Polish GDP numbers pointed to relatively shallow GDP contraction in 2020, which did not exceed 3 pct. The economy's resilience does not translate into stronger zloty due to the National Bank of Poland's renown of the most dovish central bank in the emerging markets space.