Stock Benchmarks Take a Break After Strong Rally, Dollar Dips

Equities

Futures tied to major US stock benchmarks held gains following a strong rally. The hopes over a vaccine that would put an end to COVID19 spread and restore the global economic activity boosted the risk appetite. The Dow Jones Industrial Average futures rallied to a record high of 30163, to run into slight profit-taking, and the S&P500 futures rose to a two-week high of 3653, while Nasdaq edged higher to 12171 but remained well below its all-time high. Vaccine headlines supported the flow to stocks and sectors that suffered most from COVID19 lockdowns. Market participants are looking forward to a series of economic indicators later on the day to have more insight into the latest US economic activity.

USD

The dollar index, which measures the greenback against a basket of major currencies, extended losses falling to 92.03, as investors favored riskier currencies. The Covid19 vaccines and rising prospects of a smooth transition for Biden created a medium for risk-on trading. The EURUSD rallied to $1.1914, the GBPUSD rose to $1.3383, and the AUDUSD hovered around $0.7360.

Metals

Precious metals prices remained under pressure as investors favored risky assets. The price of a gold ounce hovered slightly above $1800, the price of a silver ounce held steady near $23.30, and palladium futures eased to $2339.

Oil

Oil prices rallied to their highest levels since March despite the rise in private inventories, as risk-on sentiment prevailed. The American Petroleum Institute reported a buildup of 3.8 million barrels in US crude oil stocks. However, the vaccine announcements eased investors' woes over the global economic outlook, and boosted prospects of better oil-demand levels. The West Texas Intermediate crude January futures rose to $45.68, and Brent Blend January delivery rallied to $48.65. The US Energy Information Administration will publish the weekly oil report later today.

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