GBP - British pound
The pound took a slight hit on Thursday as it was revealed that the UK economy shrank by 2.6% in November. It was widely assumed that these figures were not going to be great, considering the UK was in a national lockdown throughout. The retail/shopping sector contracted by 3.6% and the services sector is now 9.9% below February levels, claims the Office for National Statistics. The UK now sits with latest GDP figures at 8.5% below pre-pandemic peak. Sterling has remained fairly unphased by technical data in the second half of 2020 and seems to be continuing the trend into 2021. The data also showed that EU imports were up $10bn, as businesses look to stockpile goods, foods and medicines in case the Brexit transition gets messy.
Joe Biden announced his plan for the newest US stimulus on Wednesday night, and personally acknowledged the great financial burden of such a package. In summary, he plans to spend $400 billion on combating virus directly, including an acceleration on vaccine roll out and distribution. On top of this, he is planning a $350bn injection to local and state governments in order to combat their budget shortfalls. He also plans an additional $1400 to each citizen in the form of a direct payment and in addition, extra employment/disabled benefits. The package gave the US dollar a lift across the board. If the data starts to suggest that this package has been a success, the US dollar will continue to climb.