Forex Today: Dollar not out of the woods yet

FXStreet Team FXStreet

Here is what you need to know on Wednesday, January 20:

The market mood was optimistic throughout the first half of the day, pushing the dollar lower against high-yielding rivals. Investors were waiting for comments from Treasury Secretary nominee Janet Yellen, who spoke before Congress. Her prepared remarks have been released on Monday, limiting the impact of her words on financial markets.

Nevertheless, she pledged to boost stimulus by saying that is time to go “big” on spending while adding that she is prepared to use the full array of tools to address China’s abusive and unfair practices. She also said that she wants to reverse some of the incentives to offshoring, weighing on indexes, which in turn, put a halt to the dollar’s decline.

The EUR/USD pair regained the 1.2100 level while GBP/USD advanced above 1.3600, but there was little follow-through. Seems high-yielding currencies are still unable to attract buying interest.

USD/JPY edged lower, while commodity-linked currency saw little action, with the greenback stronger against them.

In the coronavirus front, the number of new cases in the UK and the US continues to decrease, although the first reported over 33K new contagions in the last 24 hours, while the last reached the infamous mark of over 400,000 deaths. Tough restrictive measures continue in the northern hemisphere, and Germany extended its lowdown to February 14. Meanwhile, immunization through different vaccines continues moving forward in slow motion.

Gold prices remained muted, with the bright metal settling at $1,837 a troy ounce for a second consecutive day. Crude oil prices recovered some ground but remained within familiar levels.

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