The anti-risk US Dollar resumed its broader downward trajectory last week, and stays at risk to continue doing so. It has left the Greenback near lows set at the onset of this year from its major counterparts. Demand for the planet’s most liquid money faltered as sentiment retrieved in global financial markets. The S&P 500, FTSE 100 and Nikkei 225 charged higher alongside stocks in Emerging Markets.
There was also the continuation of steady profits in longer-dated Treasury yields, together with 30-year rates at highs from February 2020. Economic recovery stakes and increasing inflation expectations have also been compelling breakeven Treasury yields upward. The 10-year one is hovering around 2018 peaks, having briefly touched the highest since 2014. Disappointing core US CPI information was brushed aside as markets exchanged to the weekend.
The week ahead is cut slightly short canlı bahis siteleri on Wall Street as a result of Presidents’ Day holiday on Monday. This is as stock exchanges in China and Hong Kong are offline to the Lunar New Year. As such, reduced liquidity requirements could open the door to higher-than-normal volatility in financial markets awarded splitting developments. That could render the Greenback at a position to capitalize should volatility strike.
Focusing on the economic calendar, the US will release January’s retail revenue print. Observing a 0.7% m/m contraction in December, buys are expected to increase 0.8%. Professional production for the same period will also cross the wires on precisely the same day. Afterward, FOMC minutes can reiterate the central bank’s accommodative setting, with no urgency to do more beyond present paces in quantitative easing.
The latter could possibly be something that could continue disappointing investors, but the focus recently has and will likely be on fiscal stimulus. US President Joe Biden is apparently intending to provide about US$1.9 trillion in relief through budget reconciliation given a lack of Republican support in the Senate. This may keep on boosting longer-dated government bond returns, possibly bullish for USD. But, the Fed’s dovish stance remains supportive into a’risk-on’ surroundings, leaving the Greenback vulnerable also.
