Forex Today: Dollar shrugs off yields and continues rising, US data, EU vaccine issues and Powell eyed
|Here is what you need to know on Wednesday, March 24:
The US dollar continues higher despite falling yields and as the US considers news stimulus. The Fed Chair dismissed long-term inflation concerns. He speaks again alongside the Treasury Secretary. US Durable Goods Orders and Markit's PMIs are eyed.
Greenback grinding higher: EUR/USD is flirting with the lowest levels in four months, GBP/USD is battling to hold onto 1.37 and commodity currencies are also on the back foot. The world's reserve currency is rising despite the fall in yields, with returns on ten-year Treasuries falling to 1.60%.
The dollar and the yen are benefiting from a risk-off mood in markets, but speculation about new US stimulus – partially funded by tax hikes may also explain the moves. The White House is mulling a $3 trillion infrastructure spending package, potentially in two stages.
Why the dollar is rising while yields are falling, blame it on the taxman
Testimonies: US Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell have testified before Congress and will return to Capitol Hill on Wednesday. Powell acknowledged that inflation will probably rise in the next few months, but will not be persistent.
US Durable Goods Orders figures for February are set to show a moderate increase in investment last month, contributing to robust growth. Markit's preliminary Purchasing Managers' Indexes for March are also of interest.
US Durable Goods February Preview: Consumption to reflect labor market recovery
Vaccine nationalism: The EU is drafting rules that would limit exports of vaccines and materials used to produce them, in an attempt to ramp up its immunization campaign. The move aggravates tensions with the UK, which receives doses made on the continent. Any curbs may also slow the production of vaccines sent to other countries.
Markit's eurozone PMIs are set to show an upbeat picture for the manufacturing sector but ongoing issues for the lockdown-sensitive services sector. European Central Bank President Christine Lagarde is set to speak later in the day.
The Suez Canal is blocked after a large ship got stuck close to Port Said. The maritime traffic jam is pushing oil prices higher after they dropped on earlier in the week.
Bitcoin is trading around $55,000, rising after Tesla's founder Elon Musk tweeted that his firm will now accept Bitcoin and will not convert it into dollars. Ethereum is below $1,700 and XRP is changing hands around $0.55.
Five factors moving the US dollar in 2021 and not necessarily to the downside
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.