The U.S dollar was all fired up as major risk assets pulled back early gains paving way for the safe-haven currency to push more upward.
Currency traders are going long as rising Treasury yields triggered a risk-off move in global currency markets, with riskier currencies taking a hit.
At press time, the U.S dollar index traded high by 0.4% to trade at 91.835 index points.
Also, the flagship crypto retreated from its record high as traded around $56,368.51 with a daily trading volume of $56.6 Billion. Bitcoin is down 0.99% for the day.
At the time of writing this report, U.Stocks indexes were down as the S&P 500 Futures traded 0.5%, lower, and Nasdaq 100 futures dropped 1.6%.
In addition, Gold prices drifted lower as it paused its three-day winning streak and testing support at $700 per ounce. Investors are growing concern over rising inflation in the world’s largest economy and that sense is U.S dollar-supportive.
Investors are growing concern over inflation rising ahead and that sense is dollar-supportive
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on key macros affecting global currency markets, particularly on the monetary policy impact;
“Will the Fed continue to “walk the dovish talk’ with its US dollar negative implications. Or will the Fed “walk back” from their dovish commitments when and if it becomes clear that the fiscal and vaccine-led recovery is kicking into full gear?
“Indeed, it is the line that separates the dollar bulls from bears over the next 6 to 12 months. Until then, FX traders will continue to travel on the path of least resistance focusing on pure beta currency reflation trades like the NOK and CAD.”
Bottom line: That being said, currency traders are keying into the cat and mouse game between the US Central Bank and the world’s most liquid financial market