MARKET NEWS AND CHARTS FOR JANUARY 14, 2021

USDRUB

For the first time, Russia’s Gold overtook the US dollar in the country’s $583 billion reserves. The bulk purchases of the precious metal came amid the increasing tension between Russia and the US. Putin said he is planning to “de-dollarize” the Russian economy to dodge any US sanctions. However, it’s not only Russia that is switching to Gold as its reserves. Asian countries, including China, are ditching the US dollar. In addition to this, the US dollar is losing ground against other currencies due to the decline in the US economy along with record-breaking stimulus. During the pandemic, the US government injected $6.6 trillion in the local economy. President-elect Joe Biden also plans to add more stimulus in fiscal 2021. As for the recent reports, Russia showed a strong CPI reading at 0.8% for January 2021. This was higher than the 0.6% expectations and previous record of 0.7%. Meanwhile, CPI grew by 4.9% in December.

USDCHF

The initial jobless claims report on Thursday, January 14, is expected to add 795,000 individuals, which is 8,000 higher than the previous week. This number is expected to put pressure on the lawmakers to pass the $2,000.00 stimulus check. President-elect Joe Biden also backed the amount, which was an increase from the initial proposal of $600.00. Meanwhile, Biden promised more stimulus in 2021 once he sits at the White House. Inauguration will take place on January 20. Other key reports that investors are watching are the Import and Export Price Index report. The price of goods and services imported from other countries is expected to increase by 0.7%. The report grew by only 0.1% in last month’s report. On the other hand, the price of goods and services exported to other countries is expected to slow down in the month of December to 0.4% from November’s 0.6% data. The USDCHF pair is expected to decline towards the 0.85500 area.

USDCZK

Czechia will hold a general election in October, raising political uncertainty in the country. The ANO Party by Prime Minister Andrej Babis will need to reverse public perception on the government’s handling of COVID-19. The government’s record-breaking deficit of 341.5 billion koruna is expected to backfire on the ruling party. The government now plans to increase the allowable budget deficit to 4.9% of the country’s gross domestic product (GDP) to 320.0 billion koruna. The local economy is expected to recover from the pandemic-induced slowdown in 2021 by 3% to 5%. However, the scenario still depends on whether the vaccines will be delivered on time and if it is potent enough to contain different variants of the coronavirus. Despite the expected GDP growth this year, unemployment is expected to increase to 3.4% in 2021 from 3.2% in 2020. Inflation is also expected to decline in 2020 and 2021 at 2.3% and 2.0%, respectively.

EURCHF

Germany’s annual GDP shrink by -5.0% based on Thursday’s report, January 14. Other EU member states also recorded discouraging figures this week. Italy’s industrial production report fell -1.4% in November, lower than the -0.4% expectations and previous record of 1.4%. On an annual basis, the report dropped by -4.2%. At the same time, retail sales plummeted by -6.9% on the same reported month from 0.5%. Meanwhile, retail sales decreased by -8.1% year-on-year (YoY), the steepest in six (6) months. The uncertainty in Europe is expected to boost the safe-haven feature of the Swiss franc. One of the main concerns by investors was the rising COVID-19 cases in the region. In the UK, a new virus was found, which forces the government to impose its third nationwide lockdown. Some countries in Europe have also extended the strict measures until the end of April. This will derail the region’s recovery from the pandemic.