The US Dollar Index maintained positive sentiment and remained close to a 2-month peak on news of higher yields on US Treasury instruments
The greenback moved away from a 3-year trough against the common currency Euro after some profit taking. Analysts say that the US Dollar is destined to come under pressure, especially as expectations of additional stimulus and more easing from the Federal Reserve are highly likely under the Biden administration. Yesterday, it was confirmed that the two Senate seats from Georgia were won by Democrats, giving the Democratic Party control of not just the Executive branch but both the Senate and House of Representatives.
As of 10:12 am in Tokyo trading, the EUR/USD was trading at $1.2253, down 0.18%, and off the session trough of $1.22344. The GBP/USD was lower at $1.3553, a loss of 0.07%; the pair has ranged from a low of $1.35374 to a peak of $1.35732. The USD/JPY was higher at 103.8940 Yen, up 0.06%, not far from the session high of 104.006 Yen.
US Labor Data to Draw Market Focus
Ahead, markets are waiting to see data from the US Labor Department, specifically the Non-Farms Payroll report which will be released later today. Currently, analysts expect to see a very significant decline in new jobs, with 71,000 predicted, well off the 245,000 of the previous month. Analysts are also predicting that the unemployment rate will have increased to 6.8% from 6.7%. The Federal Reserve Bank's Federal Open Market Committee will be watching the data carefully to help craft monetary policy going forward. Currently, Jerome Powell is the head of the Fed; whether President-elect Biden chooses to retain him or to appoint his successor remains to be seen.