Dollar slides vs most currencies on optimism about Biden administration
The dollar fell against most currencies on Wednesday, as risk appetite held up on optimism about a massive stimulus package under the new Joe Biden administration that will likely bolster a U.S. economic recovery.
In afternoon trading, the dollar fell 0.4% against the yen to 103.54, sliding to a two-week low earlier in the session to 103.45.
The U.S. dollar tumbled to a three-year low versus the Canadian currency at C$1.2607, after the Bank of Canada on Wednesday opted not to cut interest rates. The greenback was last down 0.7% at C$1.2642.
The Aussie dollar rallied 0.6% to US$0.7745, while the New Zealand currency also gained 0.6% to US$0.7167.
Sterling rose to a three-year high versus the dollar of $1.3720, but surrendered some of those gains to trade up just 0.1% at $1.3643.
A combination of heightened risk appetite in global markets and UK-specific optimism lifted the pound on Wednesday. The dollar index, meanwhile, was up 0.1% at 90.483. Since the beginning of the year, the index has posted a modest 0.5% gain.
Futures positioning data still shows that investors are overwhelmingly short dollars as they figure that budget and current account deficits will weigh on the greenback.
The euro fell 0.2% against the dollar to $1.2106.
European countries are struggling to contain the contagion of the coronavirus amid worries that a new variant could lead to more stringent lockdowns and more economic pain.
Investors are also fretting about the slower pace of the rollout of vaccines relative to the United States and Britain, which may hobble economic recovery in the euro zone.
Treasury yields flat after Biden’s inauguration
U.S. Treasury yields were flat on Wednesday as President-elect Joe Biden was sworn into office.
The yield on the benchmark 10-year Treasury note fell to 1.085% around 4:00 p.m., while the yield on the 30-year Treasury bond was flat 1.835%. Yields move inversely to prices.
Reference: CNBC
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