EUR/USD drops under 1.20

GURU WISDOM

“As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.” – John Maynard Keynes
 

MARKETS

*Daily closing price
↘ EUR/USD    1.1964        (-0.58%)
↗ GBP/USD    1.3673        (+0.22%)
↗ USD/JPY    105.56        (+0.52%)
↗ S&P 500    3871.11    (+1.07%)
↘ Hang Seng    29,113.50    (-0.66%)
↘ Gold        1793.96    (-2.19%)
↗ Oil (Brent)    58.91        (+0.37%)
↗ Bitcoin    37,701.0    (+1.71%)
 

NEWS

 

Negative BOE

The British pound rose modestly after the Bank of England made negative interest rates officially part of its policy “tool kit”. In summary, the BOE thinks negative rates are an effective tool and that any negatives are outweighed by the positives. However, it has no plans to use them for the next 6 months at a minimum because the UK banking system needs time to prepare. The central bank left policy on hold at its meeting on Thursday.
 

EUR/USD

Dollar strength and uncertainty about Europe’s economic recovery given its stalled vaccine rollout has seen the euro fall below the key 1.20 figure. 
 

USD/JPY

Then dollar-yen forex pair has been adding to its aforementioned breakout with a move above 105.50 for a re-test of its November high.
 

Metals sink

A rise in US Treasury yields as well as the dollar pushed gold and silver sharply lower on Thursday. Higher yields in bond markets make gold relatively less attractive. The dollar gained after US jobless claims fell more than expected, giving rise to optimism about the economy and lifting inflation expectations. Gold is nearing the so-called ‘death cross’ where the 50 DMA crosses below the 200 DMA, a bearish technical signal.
 

DAY AHEAD 

*Times in GMT
07:00 – Germany Factory Orders s.a. (MoM)(Dec) [-1 % Exp vs. 2.3 % Prev] 
13:30 – US Nonfarm Payrolls(Jan) [50 K Exp vs. -140 K Prev]
13:30 – US Average Hourly Earnings (MoM)(Jan) [0.3 % Exp vs. 0.8 % Prev] 
13:30 – US Unemployment Rate(Jan) [6.7 % Exp vs. 6.7 % Prev]
13:30 – Canada Net Change in Employment(Jan) [-47.5 K Exp vs.     -62.6 K Prev]