Forex Today: Risk-appetite took over financial markets, gold plummeted

Here is what you need to know on Thursday, January 7:

 The dollar enjoyed from some temporal demand, but once again finished the day with losses and near multi-year lows against most of its major rivals.

At the time being, there’s no official confirmation but seems the US Georgia Senate election was led by the two Democrat candidates, granting the party control of Congress. It seems that upcoming President Joe Biden will have better chances of pushing his legislative agenda.

The Georgia election spurred risk appetite. Wall Street soared to records, with the DJIA flirting with an all-time high of 31,000. Also, US Treasury yields surged to levels last seen before the March 2020 pandemic chaos. The yield on the benchmark 10-year note hit 1.05%.

Meanwhile, US President Donald Trump insists on calling the latest election fraudulent and called for new elections. Trump supporters stormed the capitol, invading the building and clashing with the police. Tensions will likely mount during the upcoming hours. Congress activity was suspended. Lawmakers were due to certify the election’s result.

The dollar got temporal support at the beginning of the American session but lost ground as the session developed. The EUR/USD pair trades above 1.2300 after hitting 1.2344, while commodity-linked currency also reached multi-year highs.

The pound held ground, unable to rally due to persistent coronavirus concerns. The UK reported 62,5K new covid cases,  while the death toll hit 1,041.

Gold surged to $1,959 a troy ounce, from where it fell towards the 1,900 level. It finally settled at 1,910, as risk appetite weighed on the safe-haven metal.

Crude oil prices kept rallying, boosted by the EIA report which showed a draw of 8.01 million barrels in the week ended Jan 1, better than expected. WTI trades near $ 51.00 a barrel.

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