The Dollar remains on track to record net and widespread gains..The Dollar remains on track to record net and widespread gains, but it’s been far from one-way traffic or straight forward as the DXY has whip-sawed within a 90.762-89.922 range through mostly disappointing US data, mainly dovish Fed rhetoric and President-elect Biden’s fiscal stimulus plan that was pretty much as expected. Meanwhile, broad risk sentiment has turned more selective in terms of stock indices and sectors as reflation positioning continues before the dawn of a Democratic Congress, and Treasury yields have also reflected the prospect of increased issuance to fund a bigger budget deficit via deeper bear-steepening until a retracement after auctions and a concerted effort from the Fed, including chair Powell to avert a taper tantrum. On the COVID front, the spread in the US and elsewhere is still accelerating to record levels of infections and fatalities in some domains, but markets (and society in general) are looking beyond the resurgence towards light at the end of the tunnel as authorities attempt to catch up by speeding up the pace of vaccinations. However, Friday’s Greenback appreciation has been forged from renewed safe-haven demand as equities retreat further from early 2021 and/or all time highs on a mixture of doubts about the aforementioned relief bill getting approval in its current guise and whether vaccines are effective against the new pandemic strains, not to mention reports that Pfizer may miss some drug delivery targets over the coming weeks.
