The dollar was mildly higher earlier on as reports suggested that Biden is set to unveil at least a $2 trillion stimulus package later in the day. That is more than the $1.3 trillion that Schumer is trying to push for but the details will be key to watch in any case.
The key spot to watch is still the bond market and so far, yields are keeping higher after the earlier headlines with 10-year Treasury yields up 3 bps to 1.113%.
The jump in real yields also helped to pin precious metals lower, though gold is off earlier lows of $1,829.53 to hold near its 200-day moving average @ $1,841 currently.
The dollar reaction is now looking more muted with the aussie and kiwi creeping a little higher ahead of European trading. The general line of thinking is that bigger stimulus bodes well for risk trades, but could it also inadvertently boost the dollar instead?
Looking ahead, don’t forget that we’ll also be hearing more Fedspeak today with Powell also on the agenda in the US session. Any remarks on inflation and hints on policy timing may very well get the market moving before Biden’s proposal later on in the day.
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