Brexit and COVID-19 Keeps the Pound in Focus, as Riskier Assets Struggle Early on

Earlier in the Day:

It’s was a quiet start to the day on the economic calendar this morning. The Aussie Dollar was in action in the early part of the day.

While the Aussie Dollar responded to the morning stats, the markets also responded further to news of the new coronavirus strain in the UK. Riskier assets took a hit early on, in spite of U.S lawmakers delivering a U.S stimulus package on Monday.

For the Aussie Dollar

Retail sales jumped by 7% in November, according to prelim figures, coming in well ahead of a forecasted 0.6% decline. In October, retail sales had risen by 1.4%.

According to the ABS,

• Household goods retailing surged by 13% to lead the gains. Black Friday sales together with major product releases in the electrical sub-group contributed.
• The state of Victoria led the way, with sales rising by 21% in response to a full month without restrictions.
• Retail sales excl. Victoria rose by a more modest 2.7% in the month.

The Aussie Dollar moved from $0.75746 to $0.75720 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.24% to $0.7569.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.28% to $0.7082, with the Japanese Yen down by 0.02% to ¥103.34 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. GfK Consumer Climate figures for January are due out of Germany at the European open.

With the government reintroducing containment measures, consumers will be torn between the latest lockdown and COVID-19 vaccine news.

Away from the numbers, Brexit news updates will also influence.

At the time of writing, the EUR was down by 0.09% to $1.2233.

For the Pound

It’s a relatively busy day ahead on the economic calendar. Finalized 3^rd quarter GDP figures are due out along with 3^rd quarter current account figures.

We don’t expect the numbers to provide the Pound with direction, however.

The market focus will be on Brexit and COVID-19 updates throughout the day.

At the time of writing, the Pound was down by 0.31% to $1.3422.

Across the Pond

It’s a busier day ahead on the economic calendar. Key stats include finalized 3^rd quarter GDP and November existing home sales figures.

Barring a marked downward revision to GDP numbers, the stats are unlikely to have a material impact on the Dollar or risk sentiment.

The market focus will remain on Brexit and COVID-19 news. For the Dollar, support would kick in should there be evidence of a spread of the new coronavirus strain beyond the EU.

At the time of writing, the Dollar Spot Index was up by 0.17% to 90.194.

For the Loonie

It’s another particularly quiet day ahead on the economic data front. There are no material stats to provide the Loonie with direction.

The lack of stats will continue to leave the Loonie in the hands of COVID-19 news.

At the time of writing, the Loonie was down by 0.05% to C$1.2863 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.