Dollar Rally Pauses; US Yields Remain Strong

USD

The dollar index which, measures the US dollar performance against a basket of major currencies, eased slightly to 90.34 after rallying higher for three consecutive days. The spark in Treasury yields lifted the greenback as investors look forward to reflation. The US 10-year yields raced higher to 1.144%, the highest since March 2020. Market participants could be taking some profits ahead of an anticipated speech for the Federal Reserve Chairman Jerome Powell on Thursday, where we await further insight into the Fed's plan for asset purchases. The EURUSD rebounded to $1.2175, and the GBPUSD recovered to $1.3567.

Equities

Major US stock index futures edged higher as investors anticipate further stimulus from Biden's administration. The newly elected president will be unveiling a spending plan worth trillion, which would support the US economic recovery, and lead to remarkable growth. He is looking to increase minimum wages and raise the relief-bill direct payments to $2000. The Dow Jones Industrial Average futures rose to 30999, the S&P500 futures rallied to 3803, while Nasdaq futures recovered a little to 12943, after sharp declines.

Metals

Precious metals prices inched higher as the dollar weakened slightly. The price of a gold ounce appreciated to $1861, the price of a silver ounce rebounded $25.53, while palladium futures held steady near $2380.

Oil

Oil prices edged higher as the market remains supported by OPEC+ cuts. Oil producers are looking carefully to supply, as lockdowns threaten demand recovery. But also, investors are optimistic about vaccinations, which could restore economic activity soon. The West Texas Intermediate crude February delivery rose to $52.75, and Brent Blend March delivery rallied to $56.11.

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