Dollar Slips as Equities Extend Gains
DECEMBER 29, 2020
The U.S. dollar is slightly lower again as global markets remain giddy over the passing and subsequent signing of the long-awaited Covid relief bill which included $600 payments to many Americans.
We will be closely following a new wrinkle though. House Democrats passed a bill that would increase those payments to 2K, which aligns with what President Trump has recently asked for. We expect the GOP-controlled Senate to reject the bill and defy the President’s wishes. If Senate Republicans do back the bill, it will be a welcome sign for markets, possibly push Treasury yields higher and sink the dollar further.
The Nasdaq, S&P 500, and Dow Jones Industrial Average all reached all-time highs yesterday and futures show gains will be added at the open.
There is no major economic data on today’s docket. Pending home sales and the trade balance are due out tomorrow. The majority of global markets will be closed on Friday for New Year’s Day.
What to Watch Today…
- No major events scheduled for today
HOLIDAY HOURS THIS WEEK
December 31—8:30a to 6p EST; January 1—CLOSED; Tempus Online open 24×7.
The Euro has added to yesterday’s gains and remains within a whisker of breaking fresh 2.5 year highs against its American rival. The common currency has been able to take advantage of the “risk-on” environment. The Stoxx 600 is up nearly 1%.
The British pound is up a touch this morning, following a drop yesterday. The FTSE 100 index is up more than 2% today, which is its first session since the U.K. Christmas Eve trade deal with the E.U. Thinning liquidity and remaining uncertainty over how the sterling should be valued in a post-European world could lead to jerky price movements.