TEHRAN (Iran News) – The US dollar weakened across the board as investors reacted to the rising US national debt. In a statement during the weekend, the Congressional Budget Office (CBO), a nonpartisan organization, said that the US deficit will soar to more than $2.3 trillion this year, excluding the proposed $1.9 trillion stimulus package. The CBO also said that the proposed $15 minimum wage would lead to more than 1.5 million job losses. Still, these numbers will likely not deter lawmakers who are negotiating the next stimulus package.
The Japanese yen weakened sharply against the US dollar even after the relatively strong Japanese GDP numbers. The country’s statistics office said that the economy expanded by 3.0% in the fourth quarter after rising by 5.3% in the previous quarter. This growth led to an annualized increase of 12.7%, higher than the expected increase of 9.7%. This growth was mostly because of a 1.0% increase in external demand, 2.2% increase in private consumption, and 4.5% gain in capital expenditure. While the Japanese yen fell, the Nikkei 225 index rose to ¥30,000 for the first time in more than 30 years.
The euro rose today even after the relatively weak economic numbers from the European Union. According to Eurostat, the bloc’s industrial production declined by 1.6% in December as more countries in the bloc enacted new lockdown measures to reduce infections. The production declined by 0.8% on an annualized basis after falling by 0.6% in the previous month. The numbers came a day before the agency is scheduled to publish the fourth-quarter GDP data.
The GBP/USD rose sharply today as the rally of the British pound continued. The pair rose to a near three-year high of 1.3910. On the daily chart, this price is above the 25-day and 50-day moving averages. It is also above the Ichimoku cloud. It is also slightly below the upper side of the ascending channel. Therefore, the pair may continue rising as bulls target the upper side of this channel.
The EUR/USD was in a tight range today as traders digested the overall weak US dollar and the weak EU economic data. On the hourly chart, the price is still in a narrow range between 1.2113 and 1.2142. The price has also moved slightly above the 25-day exponential moving average while the Relative Strength Index (RSI) has continued to rise. The pair may continue rising as bulls target the upper side of the channel at 1.2142.
The USD/JPY rose sharply today even as the US dollar dropped across the board. It rose to an intraday high of 105.40, which is slightly above the 23.6% Fibonacci retracement level on the four-hour chart. It is also above the 28-day EMA and is slightly below the median line of the Andrews Pitchfork indicator. Therefore, the pair may continue rising as bulls aim for the resistance at 105.55.
- source : FXSTREET