Joe Biden Takes Charge, Global Stocks Rise, Dollar Slips
Although the markets view the new leadership positively, the 46th American President will face difficult times ahead.
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- The markets view the new leadership positively
- Difficult times ahead for America
Global stocks climb to a new record high on Wednesday amid optimism that the new White House administration will revive economic growth and tackle the raging pandemic. In Washington DC, Joe Biden was sworn as the 46th President of the United States. As he assumed leadership, Wall Street cheered the change of power. Major US indexes closed at record highs, led by the Nasdaq Composite, up nearly 2%, its strongest performance on an Inauguration day. The Dow Jones Industrial Average and the S&P500 rose 0.83% and 1.39%, respectively. Among companies, Netflix was one of the most favored by investors. The streaming giant soared over 16% thanks to a better-than-expected earnings report for the fourth quarter of 2020.
European stocks on Wednesday also closed in the green. The German DAX was the biggest winner, up 0.77%. The French CAC40 rose 0.53%, followed by the UK’s FTSE, higher by 0.41%.
On Wednesday, the US dollar slipped a little but remained in the weekly range. The EURUSD started the trading session with an intraday high of 1.2158 in the initial hours of the European session. A depreciation followed that took the pair down to a low of 1.2076 at the time when the Inauguration was taking place. On Thursday, traders and investors in the Asian session took the pair back above 1.2100. The EURUSD is currently hovering near the 1.2130 level.
The Yellow Metal Performs Well on Inauguration Day
Gold rose on Wednesday as investors uplifted the precious metal as a way to diversify on Inauguration Day. Gold’s price went from a low of $1,832 to a high of $1,871, an increase of over 2%. Oil dipped on the day but remained above $55. UK’s pound posted its highest level against the US dollar since May 1, 2018. The Great British pound remained well bid throughout the initial phases of the European session but slipped later as the US session unfolded. The GBPUSD reached a high of 1.3718, followed by a low of 1.3623. The exchange rate is now near the 1.3700 marks.
As Biden takes charge, US Covid-19 deaths hit a record high. The coronavirus pandemic yesterday accounted for 4,409 deaths in the US, according to the Covid Tracking Project. The report on Wednesday came after Mr. Biden held his inauguration speech in which he warned that tough times lay ahead. The virus has claimed the lives of about 400,000 Americans and more than 2 million people globally. While European countries race to speed up the vaccination process, Germany suffered record daily deaths. The country reported 20,398 new cases and 1,013 fatalities as per data from Robert Koch Institute.
Heading to cryptocurrencies, bitcoin has been in decline for a second straight day as the recent rally comes to a pause. The number one digital currency is down nearly 20% from its all-time high reached earlier this month after the latest gyrations brought the cryptocurrency to almost $42,000. The second most valuable digital currency, Ethereum, made a new top this week going above $1,400 for the first time.