Forex Today: Fed's Powell says too soon to talk about tapering, USD capped
|Here is what you need to know Monday, January 15th 2021:
- The comeback in the US dollar remains the focus in the forex space for the start of the year. On Thursday, the greenback printed a fresh high to 90.57 but dropped to a low of 90.07 when Federal Reserve's Chair, Jerome Powell, said that it was too early to talk about tapering.
- Long-end US Treasuries sold off in the afternoon as well after Powell's speech. The 10-year and 30-year yields were ending 4.1bp and 5.2bp higher, respectively.
- Investors were possibly positioning for Biden's fiscal stimulus announcement (expected at $1.9tn) later in the day, 7.15pm (0015GMT).
- Hopes of higher government spending by President-elect Joe Biden's incoming administration and a vaccine plan has led to a rise in US Treasury yields, supporting the greenback.
- The greenback has also benefitted from expectations of a continued economic recovery in the United States while countries in Europe resort to lockdowns to fend off a second COVID-19 wave.
- Meanwhile, forex markets traded sideways with modest changes on the day. The DXY was 0.2% lower while the antipodean currencies were stronger with AUD and NZD ending 0.7% and 0.8% higher, respectively. CAD was 0.5% higher.
- EURUSD struggled to maintain the bid into 1.22, falling to a low of 1.2111.
- The S&P 500 was up 0.2%, the Euro Stoxx 50 was up 0.7% and the FTSE 100 was up 0.8%. WTI firmed 1.1% to $53.5/bbl. Gold added 0.6% to $1,850.1/oz.
- Cryptocurrencies were capped with BTC falling from 40,112.78 to a low of 38,200.
- Coming up, Watch Live: $1.9 trillion plan to be presented by Biden
DXY technical analysis
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.