- DXY extends heavy recovery from the monthly low.
- US 10-year Treasury yields rally to the highest since February 2020, Wall Street closed mixed.
- Biden’s stimulus like by March 08, Yellen tries to patch transatlantic relations.
- US Retail Sales, FOMC minutes eyed for fresh impulse.
US dollar index (DXY) stays on the front foot around 90.58 while extending Tuesday’s bounce off a three-week low during Wednesday’s Asian session. In doing so, the greenback gauge takes clues from the US Treasury yields while trying to part ways from its safe-haven nature. Also favoring the DXY could be the broad risk-on mood amid optimism concerning the US covid relief package and the coronavirus (COVID-19) vaccine developments.
During the latest run-up in the US bond yields, the 10-year coupon jumped to 1.32%, the highest since February 2020 whereas the 30-year counterpart crossed the 2.0% mark.
Wall Street benchmarks closed mixed amid the day-end weakness while Bitcoin’s record top above $50,000 also portrayed the market’s optimism.
Behind the moves are the increasing chatters that US President Joe Biden’s $1.9 trillion covid relief bill will be out by March 08, as signaled by CNN’s Manu Raju. Also favoring the upbeat sentiment could be the latest jump in vaccinations as well as a reduction in virus infections.
However, challenges raised by the virus coronavirus (COVID-19) strains, mainly emanating from the UK and South Africa, probe the bulls while the US-China and the Washington-Tehran issues also try to cap the optimism amid China’s off.
Moving on, greenback traders will keep their eyes on January’s US Retail Sales, expected to recover from -0.7% to +1.0% MoM, ahead of the FOMC minutes. It should be noted that the latest updates from the Fed policymakers have been optimistic and the same could offer extra strength to the US dollar if witnessed in the minutes.
Read: US Retail Sales January Preview: Credit markets foresee consumer recovery
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