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SMATS FX Weekly Market Report | Monday 11 January 2021

SMATS FX is proud to provide our weekly analysis of currency markets and exchange rates.
SMATS FX Weekly Market Report | Monday 11 January 2021

SMATS FX is proud to provide our weekly analysis of currency markets and exchange rates.



It was a rough start to the new year for the US Dollar as poor jobs data and political distress triumphed over the positive business sentiment updates. CPI reports are due for December on Wednesday, it is expected that consumer prices will rise by another 0.3% as the Fed have already indicated that they will let inflation run before stepping in to tighten the monetary policy. On Friday, US retail sales are due out, we expect an improvement from -1.1% to -0.3% for December but we do not expect much of a move in the USD pairs. Overall demand for the Dollar should guide the Greenback this week as focus turns to how the leadership transition will take place.

Influences on HKD, SGD & AED

With no data reports due out of our exotic currencies this week, it will be down to USD strength and the local COVID-19 cases in Hong Kong, Singapore and the UAE. The leadership transition is likely to be a key event in the markets going forward. Singapore saw a sharp increase in their retail sales and PMI data last week which allowed it to start off the new year on the right foot.


The Aussie Dollar continued its dominance into the new year as positive economic updates and positive global risk sentiment helped lift the AUD last week. There is not much due out of Australia this week but their biggest training partners, China, will be releasing their trade data, foreign direct investment and CPI which should impact the AUD pairs. Risk sentiment is going to be influence the AUDs value and top tier reports from major economies could cause spikes in AUD pairs.


It was a great start to the new year for the Kiwi Dollar as it beats most majors. It is likely that the Kiwi Dollar will be driven by risk sentiment in what is going to be a light week of data. Not much in terms of data for the New Zealand Dollar which means news on COVID-19 should drive the markets. Technical analysis shows that the Kiwi Dollar is oversold against most of the major currencies after a great year last year.


Extended lockdowns, disappointing economic news caused the Euro to fall despite the positive vaccine news coming out early in the new year. There is not much to report on in Europe this week. The ECBs Christine Lagarde is set to speak at the One Panel Summit on Monday and the Reuters Next online event on Wednesday. She will then play a key role in the ECB monetary policy meeting accounts on Thursday. Italy will be taking centre stage as PM Conte faces a challenge from former PM Matteo Renzi.


Renewed lockdown measures to keep a lid on the fight against COVID-19 which forces the GBP down. PMI data, struggling businesses in the UK and new Brexit rules is likely to force the Pound weaken. A new wave of lockdown measures could continue to apply pressure to the British Pound as several MPC members are set to give speeches throughout the week. The month GDP is expected to contract by 4.6% in November which would be the first contraction in the second half of the year, the data will be released on Friday morning GMT.

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