The US dollar continues to reign supreme over the financial markets. The dollar is boosted by investors’ optimism about the economic situation in the United States, as the country has observed improving fundamental results.
US Treasury bond yields also resumed their climb higher as the country braces itself for President Biden’s speech tomorrow, which will reveal his plans for infrastructure spending.
The euro and the Japanese yen are the major currencies that lost the most ground against the USD, though the dollar’s strength applies to all pairs.
Thanks to the rise in bond yields, the stock market once again finds itself under pressure. Major stock indices in the United States will stay flat or lose positions, save for the Dow Jones, which includes fewer tech companies and has proven more resilient to the latest trading trends.
Highlights from the economic calendar today include several sentiment reports from Europe, which were overall better than the forecasts. Furthermore, Germany published some inflation rate data for March, which was in line with investors’ expectations. Later today we expect a consumer confidence report from the United States as well.
Meanwhile, the coronavirus remains a chief concern for investors at the moment. The European Union is gearing down for more lockdowns as cases within the third wave of the pandemic continue to rise. The situation remains dire in India, Brazil, and Chile as well.
Even the United States, despite an effective vaccination campaign, is beginning to see an increase in Covid-19 infections again. According to the CDC, the US might soon reflect the trends observed in Europe and South America, where the new coronavirus variants are causing trouble.
Some optimism still came on the coronavirus front, as a study indicated that the vaccines developed by Pfizer-BioNTech and Moderna, which both use mRNA technology, are 90% effective against spreading Covid-19.
They already had a proven high efficiency at preventing symptomatic Covid-19, but the new findings mean that the vaccines not only prevent people from getting sick but also from infecting others. Recall that asymptomatic patients could still infect other people with Covid-19, which may or may not be symptomatic.
