This is due in part to UK officials saying there’s no reason to think that the vaccine won’t protect against this new fast spreading strain. The media is making a big deal out of it, governments around the world are not taking chances and banning travel but based on the recovery in stocks, investors don’t share these concerns. The only question is whether investors are worried about the new coronavirus strain. Brexit and coronavirus uncertainty should benefit the US dollar as investors seek safe haven assets. Another Brexit deadline has been missed as well, raising the risk of a no deal Brexit and further losses for the currency. So its no surprise to see sterling fall sharply against the US dollar and euro. Fearing the spread of this virus, countries around world from Germany to France and Canada have raced to ban flights from the UK. Non-essential businesses have also been forced to close. These tier 4 restrictions prohibit residents from leaving their homes except for essential activities and gathering indoors with anyone outside of their household.

This prompted the UK government to impose intense restrictions across the country including the city of London. Over the weekend Prime Minister Boris Johnson said this new strain is 70% more infectious. The most important of which is the mutant coronavirus strain. Unfortunately this deal failed to lift stocks because of broader, more concerning factors. This is no panacea for the economy but its a breath of fresh air after months of haggling. Congress reached an agreement on a $900 billion coronavirus relief package that would keep millions of Americans from losing their jobless benefits. This is a shortened trading week but a variety of factors could influence how the dollar trades. The dollar started the day strong but gave up part of its gains as well. The Dow Jones Industrial Average fell more 400 points shortly after the NY open but ended the day flat. By the end of the NY session however, much of the weakness eased leading many investors to wonder if anything could sap the equity rally. The second to last week of December kicked off with losses in currencies and equities. How the US Dollar Could Trade this Holiday Weekĭaily FX Market Roundup December 21, 2020

Exceeded limit of 400 fx assets