Dollar Plunges as US Treasury Yields Falter

USD

The dollar index, which measures the greenback against a basket of major currencies, drifted lower to 89.93 as US Treasury yields retreated. The spike in the US yields in the past couple of days, on bets of reflation, lifted the US dollar against other major currencies. Yesterday, US 10-year yields faltered at 1.184%, the highest level since March 2020, and dropped to 1.107%, driving the dollar lower. Market participants are looking forward to US Consumer Price Index later today, and Fed's Chairman Powell speech tomorrow, to grasp more insight into the economic recovery and Fed's plans. The EURSUD rallied to $1.2220, and the GBPUSD edged higher to $1.3695.

Equities

US stock index futures inched higher as investors await further stimulus. President-Elect Joe Biden will unveil a massive spending plan tomorrow, which would boost the US economic growth. The Dow Jones Industrial Average futures rose to 31058, the S&P500 futures advanced to 3804, and Nasdaq futures recovered to 12932.

Metals

Precious metals price rebounded slightly as the dollar weakened along with US Treasury yields. The price of a gold ounce rose to $1863, the price of a silver ounce inched higher to $25.68, and palladium futures rallied to $2405.

Oil

Oil prices extended gains, as private data showed a drop in inventories. The American Petroleum Institute reported a decline of 5.821 million in US oil inventories. Meanwhile, market participants are optimistic over producers' supply management, which would stabilize prices with less demand and boost prices if the demand was stable. The West Texas Intermediate crude February delivery rose to $53.90, and the Brent blend March contract rallied to $57.40.

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