Forex Today: Higher yields boost dollar, melt gold as US stimulus, BOE's Super Thursday eyed


Here is what you need to know on Thursday, February 4:

US Treasury yields continue their upward march amid hopes for a large US stimulus package, carrying the dollar higher and commodities lower. The effect of vaccine news and upbeat US data is fading ahead of the BOE's rate decision and US jobless claims. 

Stimulus: Democrats have taken another step to pass President Joe Biden's $1.9 trillion coronavirus relief package via a fast track. Talks with moderates from both parties continue and the final program could be lower. Prospects of higher debt issuance and a booming economy have been prompting a sell-off in bonds, raising their yields.

Elevated returns on US government debt have pushed the dollar higher, with EUR/USD nearing 1.20 and GBP/USD dipping under 1.36. Gold has been on the back foot, nearing $1,800. 

The American economy is doing well according to the latest figures. ADP's jobs report showed a robust increase in jobs while the ISM Services Purchasing Managers' Index exceeded estimates as well. Both serve as hints toward Friday's Nonfarm Payrolls figures. Weekly jobless claims are set to drop for a third consecutive week.

See Initial Jobless Claims Preview: Do rising claims augur job losses in January?

US stock markets are relatively stable after a few days of rallies. Treasury Secretary Janet Yellen will meet regulators to discuss the frenzy around the "Reddit stocks" such as GameStop. See Gamestop (GME) fades the rebound as SEC digs into social media fraud

The Bank of England is set to leave its policy unchanged and publish its Monetary Policy Report on "Super Thursday." Governor Andrew Bailey will likely comment on the BOE's review of negative interest rates, the outlook for the economy and Britain's successful vaccination campaign. The UK inoculated 10 million of its citizens. 

See BOE Preview: Bailey set to abandon negative rates, injecting sterling with new energy

The EU is set to receive immunization doses from AstraZeneca over the weekend, allowing it to reignite its vaccination campaign. Mario Draghi, the former President of the European Central Bank, was given the mandate to try to form a new government. 

Data coming from Israel, the world's leader in the field, show a significant drop in hospitalizations and severe disease among the over 60s, who were prioritized with the jabs. 

Cryptocurrencies have been extending their gains above $38,000 and Ehtereum topping $1,600. Dogecoin is also of high interest. 

Dogecoin is on the verge of a colossal explosion if any of these two levels break

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 

EUR/USD News

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.

GBP/USD News

Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures