FX.co ★ 21.01 – Biden takes of ice, USD sliding as expected, and US stocks rallying(DJIA, USDX, USD/CAD)

Futures on the US stock indices are rallying as investors are focused on corporate reports. Joe Biden’s inauguration boosted risk-on mood across financial markets. As a result, the US dollar tumbled against major currencies.

The Dow Jones climbed 0.2%. The Nasdaq rose 0.43%. The S&P 500 grew 0.18%.

The US stocks are extending their steady rally. Yesterday, the US benchmark stock indices closed at record highs. Investors were encouraged that Joe Biden was inaugurated as the 46th US President. Traders hope that his administration will be able to implement a large-scale stimulus package. Joe Biden intends to inject 1.9 trillion dollars into the US economy.

Besides, investors are anticipating upbeat corporate earnings reports. In the American pre-market, the Union Pacific railroad company and some regional banks such as KeyCorp and Fifth Third Bancorp are due to report on their financial records. Later, investors will get to know quarterly reports by hi-tech giants, Intel and IBM.

On the whole, investors are pleased about corporate reports. It proves that top American companies coped well in the fourth quarter as the authorities decided to refrain from a lockdown.

Today the US dollar weakened notably in the early European trade because of growing demand for risky assets. Investors expect Joe Biden’s administration to forge ahead with generous financial aid to the ailing domestic economy.

The US dollar index dropped 0.32% against a basket of six rival currencies to trade at 90.17. The index has been losing ground for the third day straight since it reached a one-month high on January 18.

The Canadian dollar was the hero on Forex yesterday. Despite a slowdown in consumer inflation in December, the Bank of Canada neglects the consequences of tight restrictions. The central bank stated that a surge of coronavirus cases is a serious obstacle to an economic recovery. So, the regulator warns that the national economy could slip into recession in the first quarter. Nevertheless, the regulator presented a more optimistic long-term outlook for the domestic economy than in October. The prospects are set to improve amid mass vaccination and drastic stimulus measures. The upgraded forecasts benefit for the Canadian dollar. Yesterday, the Canadian dollar advanced to the strongest level versus the greenback since February 2018. Today, the US dollar shed another 0.18% against the loonie, so the currency pair is trading at near 1.2621.

On the first day in the White House, Joe Biden made a few crucial decisions. From now on, the US is again participating in the Paris Climate Agreement. Besides, the US remains in the ranks of the World Health Organization backed by the UN. Thus, Joe Biden cancelled two important political moves of his predecessor. On top of that, Mr. Biden stated that the US would push ahead with the vaccination campaign worldwide following the guidelines from the WHO.

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