Forex Today: Dollar extends decline, Bitcoin holds high ahead of US inflation, Powell's speech

Yohay Elam FXStreet

Here is what you need to know on Wednesday, February 10:

The dollar has been extending its decline as markets remain mostly upbeat, awaiting news on stimulus and cheered by vaccine prospects. US inflation figures and a speech by Federal Reserve Chairman Jerome Powell are eyed.

US ten-year Treasury yields have stabilized around 1.15%, after rising beforehand. This current calm in the bond market has made way for the risk-on mood to take over. While the S&P 500 did not reach new highs on Tuesday, equity markets in Asia and Europe are on the rise.

The US Senate is consumed by former President Donald Trump's trial for inciting insurrection on the Capitol and progress toward passing a large fiscal stimulus seem to have stalled. Nevertheless, any development on that front will be closely watched by investors. Democrats are pushing for a large relief plan, but probably below President Joe Biden's original $1.9 trillion proposal.

EUR/USD has topped 1.21 despite Europe's slow vaccination rollout. GBP/USD has surpassed 1.38, hitting the highest since 2018. Commodity currencies are also on the rise, with USD/CAD falling below 1.27, buoyed also by oil prices gushing higher. WTI Cure is changing hands close to $59.

UK vaccine news: One dose of the Pfizer/BioNTech coronavirus vaccine causes two-thirds protection while the second dose raises it to 80%. The UK has opted to space administering of these doses.

US inflation figures for February are of interest amid growing concerns that stimulus would trigger a rise in prices. Both the headline Consumer Price Index and Core CPI are set to rise by 0.2% monthly.

See US Consumer Price Index January Preview: Can consumer demand spur prices?

Jerome Powell, Chairman of the Federal Reserve, is slated to speak about the economy later in the day and may hint about the bank's next moves. A focus on slack in the labor market will likely reinforce the Fed's dovish stance, weighing on the dollar and supporting markets.

Bitcoin has stabilized at around $46,000 after Tesla's decision to invest in the cryptocurrency boosted it early in the week. Other digital coins are also on the rise.

More Cryptocurrencies Price Prediction: Bitcoin, Litecoin & Filecoin

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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