U.S. Dollar Falls On Improved Risk Sentiment Before Biden's Inauguration
The U.S. dollar drifted lower against its key counterparts in
the Asian session on Wednesday, as U.S. Treasury Secretary nominee
Janet Yellen called for more fiscal stimulus to bolster the economy
and investors awaited Joe Biden's swearing-in ceremony later
Yellen urged Congress to "act big" on COVID- 19 relief, arguing
that the benefits of higher spending outweighed the implications of
a higher debt burden during her confirmation hearing before the
Senate Finance Committee on Tuesday.
The value of the U.S. dollar and other currencies should be
determined by markets, Yellen said, adding that she opposes the
manipulation of the currency values by other countries to gain an
unfair advantage in trade.
Yellen's comments lifted Asian stocks, sending the dollar
Joe Biden will be sworn-in as the 46th President of the U.S amid
heightened security measures.
The incoming administration's plans to ramp up vaccinations
raise hopes of a faster economic recovery from the COVID-19
The greenback lost 0.3 percent to a 5-day low of 1.3669 versus
the pound from Tuesday's closing value of 1.3622. On the downside,
1.42 is possibly seen as its next support level.
The greenback shed 0.2 percent against the euro, reaching a
5-day low of 1.2158. The EUR/USD pair had ended Tuesday's deals at
1.2129. Further fall in the currency may challenge support around
the 1.24 level.
The greenback touched 103.72 against the yen, falling by 0.2
percent from yesterday's closing value of 103.90. Near term support
for the dollar is likely seen around the 100 level.
The greenback was 0.1 percent lower against the franc, at
0.8872. At Tuesday's close, the pair was valued at 0.8881. Next key
support for the greenback may be seen around the 0.86 region.
The U.S. currency dropped to 5-day lows of 0.7741 versus the
aussie and 0.7149 against the kiwi, compared to Tuesday's closing
values of 0.7692 and 0.7116, respectively. The greenback is seen
finding support around 0.79 versus the aussie and 0.73 against the
The greenback reached as low as 1.2691 against the loonie,
setting a 5-day low. The greenback was worth 1.2733 against the
loonie at yesterday's close. The greenback is likely to challenge
support around the 1.25 level.
Looking ahead, Eurozone CPI for December is scheduled for
release in the European session.
Canada CPI for December and U.S. NAHB housing market index for
January are due out in the New York session.
At 10:00 am ET, the Bank of Canada announces decision on
interest rates. Economists forecast the benchmark rate to hold at