Forex Today: Markets cheer Biden's first moves, ECB, jobless claims eyed

Yohay Elam FXStreet

Here is what you need to know on Thursday, January 21:

Markets have positively greeted President Biden's first moves in office amid high hopes of fiscal stimulus. The ECB is set to follow the BOJ to leave rates unchanged. After Australia reported upbeat jobs figures, weekly US Unemployment Claims are eyed.

President Joe Biden entered the White House and signed a long list of Executive Orders, such as canceling the Keystone XL pipeline – as expected and already priced into the loonie. The administration said it aimed to reach a bipartisan agreement on the covid relief plan worth $1.9 trillion.

More President Joe Biden: The Markets And The First 100 Days

The S&P 500 Index reached new highs around the inauguration and is on course to continue higher on Thursday. The safe-haven US dollar is edging lower, especially against commodity currencies. Gold broke out of range and has topped $1870.

Christine Lagarde, President of the European Central Bank, may issue a warning about the euro's high exchange rate in her first rate decision of the year. The ECB is set to leave its policy unchanged and discuss weak inflation, the current damage from the virus, and prospects for the rest of the year.

See ECB Preview: Lagarde may trigger a “buy the dip” opportunity by trying to talk down the euro

GBP/USD has been trading around 1.37 as coronavirus deaths hit new highs in the UK, but cases are falling.

The Bank of Japan stayed put as expected, marginally upgrading its growth forecast for fiscal 2021.

USD/CAD is trading closer to 1.26 after the Bank of Canada upgraded its growth forecasts and hinted that it could taper its bond-buying scheme if the economy grows rapidly. WTI Crude Oil is stable at around $53.

Australia reported an increase of 50,000 positions in December, and the unemployment rate dropped to 6.6%, better than estimated. AUD/USD is advancing toward 0.78, underpinned by the weakening USD.

Top commodities to trade during 2021 amid global reflation theme: Silver and copper to outshine gold price

Apart from the ECB, the US jobless claims are of high interest after their disappointing leap last week. They are expected to retreat from near one million.

See US Initial Jobless Claims Preview: Waiting for the second recovery

Cryptocurrencies: Bitcoin has been on the back foot, sliding below $35,000. Ethereum is also struggling.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.