Forex Today: Modest dollar’s gains as Wall Street keeps rallying
|Here is what you need to know on Friday, January 8:
The dollar continued advancing on Thursday, but pared gains mid-US session and gave up some ground. Despite its recent gains, the greenback remains the weakest currency across the board.
Wall Street extended its latest rally, with the three major indexes posting intraday gains and reaching fresh all-time highs. US Treasury yields kept advancing with the yield on the benchmark 10-year note topping 1.09%.
Investors are still hopeful about an economic comeback in the second half of the year, amid coronavirus immunization. Vaccination started on a bumpy fashion, but its slowly extending globally. Monetary and fiscal stimulus underpin high-yielding assets.
The EUR/USD retreated from multi-year highs but stabilized around 1.2260/70 with the long-term bullish trend intact. GBP/USD, on the other hand is at risk of falling amid the lack of fresh catalyst for pound.
The USD/JPY pair soared alongside Treasury yields. Commodity-linked currencies retread just modestly, consolidating not far below multi-year highs against their American rival.
Gold consolidated weekly losses holding above $1,900 a troy ounce. The bright metal remained at the lower end of its Wednesday’s range with the risk skewed to the downside.Crude oil prices also consolidate, but gains with WTI holding near $51.00 a barrel.
Financial markets ignored US political turmoil. Things cooled down a bit on Thursday and the Senate finally validated Joe Biden’s victory. Still, Democrats want US President Trump out of the White House as soon as possible, despite he has only 13 days left at the office. The drama will continue but it seems transition will take place as scheduled next Jan 20.
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