Dollar king flexing muscles ahead of key US events/data this week - ANZ

Analysts at ANZ explained that in what was a quiet night, the USD’s firmer tone re-emerged ahead of tomorrow’s Humphrey-Hawkins testimony and US January CPI data on Thursday.

Key Quotes:

"The dollar may also be benefiting as market sentiment towards the Trump administration seems to be more settled in recent days. That follows re-affirmation of support for the One China Policy, a positive Summit with Japan’s PM Abe, and expectations of details on Trump’s tax initiatives later this month.

In anticipation that Yellen should acknowledge the ongoing improvement in inflation and the labour market, bond yields edged higher, with the yield on the 10-year note rising 3bps to 2.44%. That was despite a weak showing for oil as WTI for near-term delivery fell 1.9% to USD52.8/bbl. Equity markets had a good night as growth expectations remain optimistic.

The S&P 500 rose 0.5%, the DAX was up 0.9% and the FTSE 100 rose 0.3%. Gold spot fell 0.8% to USD1224/oz."