Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell’s pledge to keep monetary policy accommodative.
Britain is set to further accelerate its vaccination campaign next week. Prime Minister Boris Johnson is under pressure from a group of MPs pushing to loosen the lockdown. France, Germany and Spain are tightening restrictions as cases and deaths remain elevated.
EUR/USD has fallen below 1.2150 as the safe-haven dollar gains ground, while USD/JPY remained trapped in a range below 104.00. GBP/USD is off the lows on the upbeat UK GDP but below 1.37.
Gold has been clinging to $1,850, edging higher amid prospects of more fiscal and monetary stimulus.
Oil was steady near a 10-month high on optimism that a potential U.S. stimulus package may boost spending and lift fuel demand.
The focus now shifts to US Retail Sales figures for December that are expected to have remained mostly unchanged after falling in November. Industrial output has likely continued its upward march, as the sector is less impacted by the virus. Finally, the University of Michigan’s preliminary Consumer Sentiment Index statistics for January will likely show a small decline.