Forex Today: Dollar retreats from highs ahead of Yellen's testimony, vaccine/virus news eyed
|Here is what you need to know on Tuesday, January 19:
The US dollar is paring its gains as US traders return from a long weekend, pushing stock futures higher. Treasury Secretary nominee Yellen testifies later, setting the case for fiscal stimulus. Coronavirus continues raging with Germany considering more restrictions and Britain pushing vaccines.
Stocks are moving higher after a somewhat "blue" Monday amid a bank holiday in the day. The better market mood is weighing on the dollar, reversing its gains. Former Federal Reserve Chair Janet Yellen testifies in Congress as part of her confirmation hearings for Treasury Secretary. In her prepared remarks, Yellen stated that now is the time to spend.
Comments about debt and the dollar – in which Yellen is set to call for market-driven exchange rates – are also watched. Gold has been edging higher around $1,840 ahead of Yellen's testimony.
Five factors moving the US dollar in 2021 and not necessarily to the downside
President-elect Joe Biden prepares for the inauguration on Wednesday. Apart from passing the $1.9 trillion stimulus package, there is high uncertainty about his first Executive Orders. One such move would be canceling the Keystone XL pipeline leading oil from Canada, resulting in the loonie's slide. Outgoing President Donald Trump is set to offer pardons before leaving office but is unlikely to make market-moving announcements. Fears of violence are shrugged off by markets.
EUR/USD is edging higher, despite concerns that Germany will not only extend the lockdown but also tighten. The German ZEW Economic Sentiment is set to reflect optimism about the future but a dire situation at the moment. it.
In Italy, Prime Minister Giuseppe Conte survived a confidence vote in the lower chamber, and now faces one in the Senate. Immunization in Europe is advancing at a slow pace.
GBP/USD is holding above 1.36 as Britain has already 6.65% of its population and continues at full speed. A recent drop in cases is encouraging.
Cryptocurrencies: Bitcoin has been advancing above the $36,000 level, finding new strength after falling from the highs. Ethereum stands out with a surge above $1,300.
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