Madness in DC

Today’s news headlines:

‘Angry mobs of Trump supporters interrupt transfer of power’. Yesterday, angry Trump supporters stormed the US capitol building, forcing lawmakers to halt proceedings that would have certified Joe Biden’s presidential victory. Mr Biden said that US democracy was under ‘unprecedented assault’ and questions will be asked whether President Trump is fit to remain in office for the last two weeks of his term. Members of the House Judiciary Committee criticised Trump’s willingness to incite violence and social unrest to attempt and overturn the result of the democratic election by force, and called for the President to be ushered out of the White House. (Financial Times)

‘Democrats take control of US Senate with two Georgia victories’. Democrats quietly took control of the US Senate last night, after Jon Ossoff won his run-off election, giving Joe Biden control of both houses of Congress. This means the Democrats will have an easier time forcing their policies through the US political system, with the Senate split 50-50 and Vice President Kamala Harris in charge of tiebreaking votes. The result is likely to support risk sentiment in markets, with US bonds having already sold off overnight. (Financial Times)

Today's events, rates, and data 

  • The US Dollar Index hovered around a three-year low into this morning’s session following the Democrats capture of the US Senate. This measure of Dollar strength has now fallen around 15% since the height of the pandemic, with further losses expected in the coming weeks and months, especially against commodity currencies like the Australian Dollar. Emerging market currencies could also get a boost, as sentiment for global economic growth improves.

Today's events

German Factory Orders: 2.3% vs 3.3% previously
US Weekly Jobless Claims: 1.30pm
US ISM Services PMI: 3.00pm
FOMC Member Evans Speaks: 6.00pm

Interbank rates

GBP/USD: 1.3575
GBP/EUR: 1.1040
EUR/USD: 1.2295
USD/CAD: 1.2695