Forex Today: Dollar’s weakness set to continue

Here is what you need to know on Monday, January 4:

The dollar closed the year on a weak note and may remain under selling pressure. Wall Street kept advancing, adding pressure on the greenback. The DJIA and the S&P closed at record highs.

The shared currency eased on profit-taking but held above 1.2200 against its American rival. Commodity-linked currencies and the pound hold on to gains and could keep on rallying. The latter rallied on relief after the UK, and the EU clinched a post-Brexit deal.

Financial markets will likely return to normal this week, although some choppy trading is expected ahead of Friday when the US will publish the December Nonfarm Payrolls report.

The world continues to gyrate around the pandemic. The coronavirus is rapidly spreading globally, and restrictive measures are being announced, particularly in Europe. Immunization through different vaccines kick-started in December, but so far, roughly 12 million doses have been applied, according to Bloomberg. The total number of cases worldwide has surpassed 85 million, while the death toll is at 1.85 million. Restrictive measures are in place, and economic growth expected for the second half of 2021, may be delayed.

The dollar’s weakness and rallying equities underpinned commodities. Gold trades around $ 1900 a troy ounce, while WTI settled at $48.40 a barrel.

Cryptocurrencies keep rallying, with Bitcoin reaching $31,000 over the weekend.