Futures on the US stock indices are making an upward correction. The US dollar is sliding against a basket of six major currencies. The Canadian dollar is holding the upper hand over the greenback.
The Dow Jones gained 0.23% today. The Nasdaq rose 0.4%. The S&P 500 inched up 0.25%.
Analysts say that the US equity market could resume its rally after a minor dip yesterday when the benchmark US stock indices lost from 0.3% to 1.2%. The decline yesterday was mainly caused by the news on an impeachment of President Donald Trump.
Market participants are anticipating the season of corporate reports in the US which is due this week. On Friday, several large US banks will provide their financial records for 2020. Analysts expect upbeat financial statements on a yearly basis that would be welcome news for investors. No doubt, the stimulus measures which are in force nowadays encourage growing incomes of households.
Investors pin hopes on the bullish equity market this year. Such hopes are fed by the vaccination campaign and a relief package from the government.
Importantly, the positive sentiment is overshadowed by warnings of temporary instability in the nearest months. Such turmoil comes as a result of overvalued stocks in some sectors of the equity market and high coronavirus rates. Besides, political jitters in the US were triggered by the recent clashes on Capitol Hill.
Meanwhile, the US dollar dipped against the euro following three sessions of gains. This decline is viewed as a downward correction. Nevertheless, the greenback is holding steady amid rising yields of US Treasuries. The US dollar index edged down 0.10% against its six major rivals to trade at 90.42.
Yields of the 10-year benchmark bonds climbed to the highest level in 10 months in anticipation of extra public spending under Joe Biden’s presidency. The President –elect pledged to unveil his economic program in two days, on January 14. He highlighted that solid investments are needed to overcome the fallout from the pandemic and prop up the ailing domestic economy. Besides, he added that he would ensure stimulus programs worth trillion of dollars.
The USD/CAD pair is trading lower amid the greenback’s weakness. The currency pair shed 0.25% today to trade at 1.2746.
Today traders are alert to comments from several Fed’s officials. Experts guess they will reject suggestions for a reduction in fiscal stimulus. Last week, some Fed’s officials fueled rumors that the US central bank could scale back fiscal stimulus at the end of this year.