Futures on the US stock indices are growing amid optimism about progress in the vaccination campaign. The US dollar is regaining losses incurred in the morning. The Canadian dollar is losing steam.
The US stock indices are trading higher today as Wall Street is encouraged by progress in the nationwide vaccination and the long-awaited fiscal stimulus which will be implemented in the near time.
The Dow Jones climbed 0.37%. The Nasdaq jumped 0.73%. The S&P 500 is 0.61% higher.
The US markets are overwhelmed by optimism for obvious reasons. First, the coronavirus rates are creeping lower as countries around the world are pushing ahead with mass vaccination. Second, governments in advanced economies provide stimulus measures that contribute to a recovery in the global economy.
On Saturday, the US House of Representatives voted for a coronavirus relief package worth 1.9 trillion dollars. The Senate is due to approve the bill in the next move. Eventually, the bill will come into force under President Joe Biden’s signature.
The US dollar was on the defensive in the Asian trade. Later, the greenback asserted strength amid investors’ optimism and sapped yields of US Treasuries. On the contrary, commodity currencies like the Canadian dollar lost their gains.
The US dollar grew 0.26% against a basket of six major currencies to trade at 91.003.
The loonie dollar shed 0.15% against its American rival. The USD/CAD pair is now trading at near 1.2641.
Financial markets were alarmed by soaring yields of US Treasuries in the recent weeks. Investors are betting on a rapid global economic recovery which rests on a package of stimulus measures, including tax perks and massive budget spending. Analysts reckon that such fiscal stimulus will spur inflation and assure central banks to tighten monetary policies ahead of schedule.
Experts believe that Fed Chairman Jerome Powell will confirm comments of other Fed officials in his speech tomorrow. The market wants to hear that the US Fed will not raise rates earlier than planned because the US economic conditions are still far from the central bank’s target criteria. Powell’s remarks are expected to ease volatility in the bond market and to stall the US dollar’s advance in the short term.
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