Forex Today: Covid strains, US data and Georgia's critical elections on traders' minds
|Here is what you need to know on Tuesday, January 5:
Markets are cautious after falling on Monday as worries about the new coronavirus strain prompted the third UK lockdown. Uncertainty about Georgia's special elections is looming as well. The ISM Manufacturing PMI stands out on the economic calendar.
Coronavirus: UK Prime Minister Boris Johnson announced a third nationwide lockdown that includes schools and is reminiscent of the harsh shuttering in the spring. The move came in response to a surge in COVID-19 infections that is overwhelming hospitals.
The new covid strain B.1.1.7 is seen as responsible for the fast spread. Concerns are growing about the efficiency of vaccines against a different South African variant. The PM's exit strategy relies on vaccinations as Britain began administering the University of Oxford/AstraZeneca vaccine. The news weighed on the pound and also on broader markets.
Europe: Germany extended its lockdown to the end of January amid stubbornly high cases. Both Berlin and Paris were criticized for a slow pace of immunizations and vowed to ramp up distribution. EUR/USD is holding above 1.2250.
US politics: Citizens in the southern state of Georgia go to the polls to determine control of the Senate. Republican David Perdue competes with Democratic rival Jon Ossof and GOP Senator Kelly Loeffler battles Raphael Warnock. President-elect Joe Biden needs both Democratic candidates to win to obtain effective control of the Senate.
Gold prices remain elevated in anticipation of a Democratic win that would open the door to a multi-million relief package.
See Georgia Elections Preview: Markets geared for a special moment, three scenarios
Outgoing President Donald Trump is still trying to overturn his loss ahead of a special session of Congress on Wednesday, causing a split within the Republican Party. Both uncertainties weighed on sentiment on Monday.
The New York Stock Exchange announced it would abandon plans to delist several Chinese companies. The initial move came in response to Trump's Executive Order related to state-owned firms. The news is risk-positive.
The ISM Manufacturing Purchasing Managers' Index for December is set to show ongoing growth in the industrial sector. The publican and its employment component serve as hints toward Friday's Nonfarm Payrolls.
See Manufacturing PMI Preview: COVID is the present but recovery is the future
Oil prices are stabilizing around $47 after the OPEC+ gathering on Monday ended without a conclusion. Talks about production cuts continue on Tuesday.
Bitcoin is trading around $31,000, off the highs but on high ground. JP Morgan suggests the cryptocurrency's price could hit $146,000. Ethereum is changing hands around $1,000, while Ripple remains on the back foot.
More Best Stocks to Buy Forecast 2021: Vaccines and zero rates to broaden recovery
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.