Sunday, January 24We Break the News

Dollar Rebounds to Trade Slightly Higher

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The dollar index steadied around 90.2 on Wednesday as a recent rally fuelled by soaring Treasury yields seems to be running out and as two Fed officials eased speculation that asset purchases could be tapered soon. James Bullard and Eric Rosengren said Tuesday monetary support will still be needed for some time. Meanwhile, rising coronavirus cases and fresh lockdowns in Europe and comments from ECB Villeroy de Galhau that the ECB will keep an easy stance for as long as needed pushed the euro down. Still, the long-term outlook for the USD remains bearish, as an increase in fiscal spending would raise the budget and current account deficits, making the greenback an increasingly unattractive investment.

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