Dollar Begins the Year Under Pressure
The dollar has started 2021 right where it left off last year: under pressure.
The beleaguered greenback is down across the board as global optimism has stocks in rally mode. Futures for the S&P 500 show the index will open at a new record high. The Bloomberg Dollar Index is at its lowest level in nearly three years.
There isn’t much on today’s docket that will affect the dollar’s direction with only Markit Manufacturing PMI due out at 9:45 a.m. Tomorrow the state of Georgia will hold its run-off election for two Senate seats that could determine the balance of power in Washington. The next day the U.S. Congress will meet to count the electoral votes and declare the winner of the Presidential election. Minutes from the last Fed meeting will be released on Wednesday afternoon. Non-Farm payrolls will round out the busy week on Friday morning.
What to Watch Today…
- Markit Manufacturing at 9:45 am
The Euro has taken advantage of the risk-on mood and has rallied 0.7% versus the dollar to start the new year. Euro-area data showed that manufacturing grew at the fastest pace in 2.5 years last month. A breakdown showed that Germany led the way with its best monthly reading in three years. The data sparked a risk rally and send the Stoxx Europe 600 up 1.4%.
Unlike its other G10 counterparts, the British pound was unable to extend gains against the U.S. dollar. Instead, the sterling slumped 0.3%. Growing concerns over escalating coronavirus cases and threats of new lockdowns could be to blame. Conversely, traders may be focusing on the economic reality that Britain faces in a post-EU world. Nevertheless, GBP/USD is within half a percent of its strongest level since May of 2018.