Forex Today: High yields limit USD losses as Dems favored in Georgia, ADP NFP, Fed minutes eyed


Here is what you need to know on Tuesday, January 6:

Democrats are seen as favorites to win both Senate races in Georgia after most of the counting is done. Prospects of fiscal stimulus are pushing yields higher and providing some support to the dollar. Concerns about the contagious covid variants and slow vaccination campaigns weigh on sentiment. The ADP jobs report and the Federal Reserve's minutes are eyed. 

Georgia: Around 97% of votes have been counted in the dual Senate races that determine control of the Senate with remaining votes located in Democratic-leaning counties. Dems need to win both seats to effectively lead the upper chamber and push through additional stimulus. 

Republican Senator Kelly Loeffler is trading by around 36,000 against Democratic rival Raphael Warnock. GOP Senator David Perdue is leading Democrat Jon Ossof by only 700 votes, and analysts foresee the race flipped toward Ossof once counting resumes in the US morning. If this second race is within 0.5%, a recount is held. 

Rising chances of stimulus have pushed investors away from bonds, thus boosting the ten-year Treasury yield above 1%. This increase counters the losses of the safe-haven dollar. 

President Donald Trump continues trying to overturn his loss ahead of the Wednesday session of Congress which is set to ratify President-elect Joe Biden's win. Markets are shrugging off prospects for a messy event. 

Coronavirus: Germany extended its lockdown until the end of January amid a stubbornly high caseload and death toll. The European Medicines Agency (EMA) is set to approve Moderna's vaccine on Wednesday. Governments across the continent are under pressure to ramp up the slow distribution of jabs. 

Covid strain: Scientists in the UK are concerned that the South African variant may be more complex than the British one and potentially resistant to the virus. Britain is under a strict shuttering, reminiscent of the spring.

More Coronavirus: Statistics, herd immunity, vaccine calendar and impact on financial markets and currencies

ADP's Nonfarm Payrolls are set to show a modest increase in positions in December after reporting a gain of 307,000 in December. The publication serves as a hint toward Friday's official labor report. The ISM Manufacturing Purchasing Managers' Index smashed expectations with 60.7 points, pointing to robust growth in the industrial sector.

The Federal Reserve releases meeting minutes from its last decision of 2020, which included a pledge to keep bond-buying at an elevated pace. Investors will try to find clues about the Fed's next moves. 

WTI Crude Oil trades at around $50 after Saudi Arabia agreed to voluntarily cut its output by around one million barrels per day. The unilateral moves come despite an increase in output by Russia and Kazakhstan. 

Bitcoin has surpassed the $35,000 level, a new historic high. Ethereum is changing hands above $1,100, carried higher as well.

Five factors moving the US dollar in 2021 and not necessarily to the downside

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD: Further declines remain well in store

EUR/USD: Further declines remain well in store

EUR/USD broke below the key 1.0500 support to clock a new 2024 low, always on the back of the intense strength in the Greenback, which sent the US Dollar Index (DXY) to fresh yearly peaks past 107.00 ahead of key US data releases on Friday.

EUR/USD News
GBP/USD reclaims the 1.2700 barrier and above

GBP/USD reclaims the 1.2700 barrier and above

In line with the rest of its risk-related peers, GBP/USD leaves behind the initial drop to multi-month lows near 1.2630 and attempts a move beyond 1.2700 the figure amidst renewed weakness in the Greenback.

GBP/USD News
Gold trims early losses hovers around $2,575

Gold trims early losses hovers around $2,575

The loss of momentum in the US Dollar and the retracement in US yields across the curve allow Gold prices to pick up some upside traction and revisit the $2,570 zone per ounce troy, trimming part of their early losses.

Gold News
Dogecoin Price Prediction: Could DOGE turn deflationary after 100% rise? Elon Musk weighs in

Dogecoin Price Prediction: Could DOGE turn deflationary after 100% rise? Elon Musk weighs in

Dogecoin (DOGE) is down 4% on Thursday after key figures, including Elon Musk, shared views on its token design and what a deflationary path could mean for its appeal as a currency.

Read more
Trump vs CPI

Trump vs CPI

US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis. 

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures