Forex Today: Yellen's stimulus boosts sentiment ahead of Biden's inauguration, BOC, Bailey eyed

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

The market mood is cheerful with stocks and gold rising and the dollar retreating ahead of Biden's inauguration. Yellen has made the case for more stimulus, boosting sentiment. The BOC is set to leave rates unchanged and the BOE's Bailey is set to speak. Coronavirus continues raging.

Treasury Secretary nominee Janet Yellen appeared before the Senate's Finance Committee for her confirmation hearings and urged lawmakers to "go big." The former Federal Reserve Chair dismissed concerns of debt and supported a market-determined exchange rate for the dollar – a departure from a "strong dollar" policy. Optimism about stimulus has been cheered by markets, weighing on the safe-haven dollar. 

President-elect Joe Biden is inaugurated later in the day and his first actions in office will be closely watched by markets. Apart from promoting the $1.9 trillion relief package, investors await meaningful actions related to the environment or infrastructure. 

Five factors moving the US dollar in 2021 and not necessarily to the downside

The Bank of Canada is set to leave its interest rate unchanged in the first such event of 2021. USD/CAD has been hovering around 1.27, with the loonie recovering from Biden's plan to cancel the Keystone XL oil pipeline. Ahead of the BOC, Canada release inflation figures for December. 

See BOC Preview: No change anticipated in interest rate

Andrew Bailey, Governor of the Bank of England, speaks later in the day and may shed light on the current state of the economy. UK inflation rose by 0.6% in 2020, marginally above expectations. COVID-19 cases are edging lower in Britain, but the government insists on maintaining the lockdown until more people get their vaccinations.

US coronavirus deaths have surpassed the grim 400,000 milestone. The silver lining is that pressure on California's hospitals is falling. 

Europe: Germany extended its lockdown through February 14 and other European countries are also considering lengthening their restrictions. Italian Prime Minister Giuseppe Conte survived a vote of no confidence in the Senate, allowing the government to continue. 

Cryptocurrencies: Ethereum is holding onto most of its gains after hitting an all-time high of $1,440 on Tuesday. Bitcoin is hovering around $35,000, off the highs. 

Bitcoin Price Forecast 2021: BTC reaching new horizons, aiming for $100,000

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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD falls toward 1.19 after robust US Nonfarm Payrolls data

EUR/USD is trading above 1.19 after dipping below that number in response to the US Nonfarm Payrolls, which showed an increase of 379K jobs in February. Higher yields in response to Powell are keeping the dollar bid.


GBP/USD recovers after post-NFP dip below 1.38

GBP/USD is trading above 1.38 bus till down the day. The US gained 379.000 jobs, roughly double than expected and supporting the dollar. The Senate's stimulus debate is eyed.


XAU/USD battles 1700 level

Gold is staging a rebound toward $1,700 amid proift-taking ahead of the weekend but remains on track to close the third straight week in the negative territory.

Gold News

Ethereum price primed for a swift recovery as the network prepares for a major update in July

Ethereum price aims for a significant recovery towards $2,000. A major upgrade scheduled for July intends to fix the problem with gas fees on Ethereum. ETH miners are not happy with the decision.

Read more

US Dollar Index pushes higher to 92.20 on stellar Payrolls

The march north in the greenback remains unabated and trade in fresh 2021 highs beyond the 92.00 hurdle when tracked by the US Dollar Index (DXY).

US Dollar Index News