Commodity News
HeadLine : Dollar hovers near one-month high as Biden's FX policy takes shape
Date : Jan 19 2021
The dollar hovered around its highest in nearly one month on Tuesday with traders expecting U.S. Treasury Secretary nominee Janet Yellen to affirm a more traditional commitment to market-set currency rates when she testifies at Capitol Hill later. President-elect Joe Biden's pick to head the Treasury is prepared to say the United States "doesn't seek a weaker currency to gain competitive advantage", returning to a more traditional posture after outgoing President Donald Trump often railed against dollar strength. The greenback has started the year with a near 2% rally against major peers, supported by a rise U.S. Treasury yields in response to Biden's plan for a $1.9 trillion pandemic relief package. The safe-haven currency fell nearly 7% last year on expectations U.S. monetary policy would stay ultra-loose and on hopes for a post-pandemic global recovery. The greenback has also been helped recently by an unwinding of bearish bets, with data showing that hedge funds piled up the biggest net short position since May 2011 in the week ended Jan. 12. Such large positions suggest that traders would be relatively more inclined to reduce their positions than add to already big bets. The dollar index was 0.1% lower at 90.690 in early Asian trading, after edging as high as 90.94 overnight for the first time since Dec. 21. Trading was subdued with U.S. markets shut for Martin Luther King Jr. Day on Monday.

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