Stocks Cheer Biden Inauguration, FX Traders Look To ECB

Like the ECB, the Bank of Japan is also expected to keep monetary policy unchanged but the difference here is that the BoJ could downgrade its economic assessment and economic projections. Ravaged by a second wave of coronavirus cases, the government expanded its state of emergency to cover to 7 more areas, encompassing more than half of the country’s GDP output. Although none of that seemed to matter for Japanese Yen traders who drove the currency higher versus the euro and US dollar.

Meanwhile, the Canadian dollar was the day’s best-performing currency. Although consumer price growth slowed in the month of December, the Bank of Canada looked past the economic impact of COVID-19 restrictions to the recovery. The central bank said the resurgence in cases are a serious setback that will cause Q1 growth to turn negative but “beyond the near term, the outlook for Canada is now stronger and more secure than in the October projection, thanks to earlier-than-expected availability of vaccines and significant ongoing policy stimulus.” This upbeat outlook drove the Canadian dollar to its strongest level versus the US dollar since February 2018. The Australian and New Zealand dollars also powered higher ahead of Australia’s labor market report. The sterling was boosted by stronger inflation.

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