The latest rejection above 1.23 is accompanied by losses in the Asian equities and the US stock futures. Major news agencies such as The New York Times are predicting a Democrat victory in Georgia elections. “Both Democrats remain heavily favored, despite their deficit in the tabulated vote. They’re favored to win the vote left to be counted by 9 to 10 points,” The New York Times’ Nate Kohn tweeted a few minutes ago.

A Democratic sweep will give the party control of the Senate and pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes, and bigger fiscal stimulus.

Markets are currency focusing on prospects of greater corporate regulation and higher taxes, as evidenced by the stock market losses. EUR/USD may extend losses if the risk aversion worsens during European hours.

Data-wise, the focus will be on the German Consumer Price Index for December. The data due at 13:00 GMT is expected to show the cost of living rose 0.7% month-on-month in December versus November’s 1% drop. A bigger-than-expected rise is needed to help the pair establish a foothold above 1.23. The US FOMC minutes, due at 19:00 GMT, could also inject volatility into forex markets.

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